Which of the Following Statements Is Not True Regarding the Use

question 100

Multiple Choice

Which of the following statements is not true regarding the use of a judgmental approach by auditors in determining whether a misstatement is clearly trivial?

• A) The determination is based on past auditor experience.
• B) The determination is usually not very defensible to third-party users.
• C) The determination is usually not very defensible to regulators.
• D) The determination uses percentages for the likelihood of misstatement.

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Definitions:

Financial Information

Data about a company's past, present, and future financial health and performance.

Financial Statements

Reports that provide a summary of a company's financial performance and position, including balance sheet, income statement, and cash flow statement.

Proprietorship

Proprietorship, also known as a sole proprietorship, is a business owned and operated by one individual, where there is no legal distinction between the owner and the business entity.

Personal Assets

Assets owned by an individual, including property, cash, and investments, that are not associated with any business activities.