A material weakness, which is more severe than a significant deficiency, is an internal control deficiency or collection of deficiencies that create a material misstatement in a company's financial statements. A significant deficiency, according to the SEC, is one that negatively affects the "company's ability to record, process, summarize and report financial information, to the external auditor and the audit committee, with the intended result that these parties can more effectively carry out their respective responsibilities with regard to the company’s financial reporting."