Information Is Considered Quantitatively Material If It _______

question 137

Multiple Choice

Information is considered quantitatively material if it _______.

• A)exceeds the dollar magnitude of an auditor's planning materiality assessment
• B)affects a user's decision-making process for a reason other than its dollar magnitude
• C)indicates the audit client is in danger of breaching a debt covenant
• D)indicates there is a change in client operations that affects the level of risk faced by the client

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Definitions:

Statement of Cash Flows

A financial report that shows how changes in balance sheet accounts and income affect cash and cash equivalents, divided into operating, investing, and financing activities.

Operating Activities

Financial transactions and events related to the core business functions, including revenue and expense activities.

Indirect Method

A cash flow statement presentation method that adjusts net income for the changes in balance sheet accounts to calculate cash flow from operating activities.

Net Income

The total profit of a company after all expenses, taxes, and costs have been deducted from total revenue, often referred to as the bottom line.