For the Audit of a for Profit Company, Materiality Should

question 29

Multiple Choice

For the audit of a for profit company, materiality should be set:

• A)To 5% of profit or 1% of sales
• B)By the field auditor once they begin to gather evidence.
• C)By the client's board of directors who represent the shareholders.
• D)Based on both quantitative and qualitative criteria.

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Definitions:

Nominal Scale

A level of measurement used for data that can be categorized but not logically ordered, involving labels or names without inherent numerical value.

Variables

Variables are elements or factors that can change and affect the outcome of scientific experiments or research studies.

Regression Equation

A statistical method used to predict the value of a dependent variable based on one or more independent variables.

Known Score

A score or result that is established or confirmed prior to experimentation or analysis.