According to AASB 108, Omissions or Misstatements Are Material If

question 2

Multiple Choice

According to AASB 108, omissions or misstatements are material if they:

• A) have resulted from an act of fraud.
• B) are less than 10% of the relevant base amount.
• C) are greater than 10% of the relevant base amount.
• D) could influence the economic decisions of users as based on the financial statements.

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Definitions:

Heuristics

Shortcuts or “rules of thumb” that allow us to make judgments and decisions quickly and efficiently.

Rules Of Thumb

Simple, practical guidelines or principles derived from experience and used to make decisions or solve problems quickly.

Randomness Error

The tendency for people to believe they can predict the outcome of chance events based on false information or superstition.

Projection Bias

The inclination to believe other people think, feel, and act the same way we do.