This article first appeared on CPA Practice Advisor.

A material weakness is often the result of deficiencies in one or more of a company’s internal controls. Material weaknesses can have damaging effects on a company’s credit rating and share price, and lead to higher audit fees and loss of investor confidence. Oftentimes, there is not one simple cause for the material weakness, but rather an aggregation of control deficiencies that could yield a material misstatement in the financial statements. As a result, public companies strive to prevent such deficiencies in internal control. For companies experiencing rapid growth or a period of significant change, however, the risk that controls are not properly designed or operating effectively is significantly heightened.

Fortunately, understanding trends in material weaknesses and the common situations where such deficiencies occur provides companies a path to mitigate the related risks. Here are some common scenarios that add significant risk to a company’s internal control over financial reporting (ICFR).