Choice "C" is correct. A lack of objectivity by those responsible for accounting decisions represents a significant internal control deficiency because it may result in financial statements that are biased rather than being presented fairly. This is a matter that would merit attention by those charged with governance.
Choice "d" is incorrect. Management's failure to renegotiate unfavorable long-term purchase commitments does not represent a significant deficiency in internal control.
Choice "b" is incorrect. Going concern problems do not represent a significant deficiency in internal control.
Choice "a" is incorrect. Management's plan to reduce its ownership equity in the entity does not represent a significant deficiency in internal control.