The SEC Is Concerned That Auditors Don't Pay Enough Attention

question 70

Multiple Choice

The SEC is concerned that auditors don't pay enough attention to qualitative factors affecting materiality because:

• A) Qualitative factors may cause quantitatively small misstatements to become material
• B) Quantitative factors are not always useful
• C) Quantitative factors cannot be accumulated to assess overall materiality
• D) All are of concern to the SEC

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Definitions:

Cataclysmic Events

Large-scale and often sudden events causing great damage or suffering, such as natural disasters or wars.

Intentional Acts

Deliberate actions taken by individuals, often with a specific purpose or outcome in mind.

Personal Optimism

An individual's tendency to hold a positive outlook towards their future or the outcome of specific endeavors.

Coping With Stress

Various strategies and methods used by individuals to handle, reduce, or manage their stress and its effects on their lives.