Which of These Factors Could Not Be the Cause of a Material

question 6

Multiple Choice

Which of these factors could not be the cause of a material misstatement?

• A) selection of inappropriate accounting policies
• B) inadequate disclosure.
• C) disagreement with those charged with governance in relation to the financial statements
• D) none of the above, i.e. all could be the cause of material misstatement

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Definitions:

Straight-Line Method

The straight-line method is a way of calculating depreciation by evenly spreading the cost of an asset over its useful life.

R&D Costs

Expenditures related to the research and development of company’s products or services.

Impairment Losses

Financial losses recognized when the carrying amount of an asset exceeds its recoverable amount.

GAAP

Generally Accepted Accounting Principles, a standard framework of guidelines for financial accounting used in any given jurisdiction, notably the U.S.