To Which of the Following Matters Would Materiality Limits Not

question 598

Multiple Choice

To which of the following matters would materiality limits not apply in obtaining written management representations?

• A) The availability of minutes of stockholders' and directors' meetings.
• B) Losses from purchase commitments at prices in excess of market value.
• C) The disclosure of compensating balance arrangements involving related parties.
• D) Reductions of obsolete inventory to net realizable value.

---

Definitions:

Rational Method

A logical approach to gaining knowledge, often involving critical thinking and deductive reasoning.

Projective Tests

Psychological assessments that use ambiguous stimuli to elicit responses that are thought to reveal a person's unconscious thoughts and feelings.

Validity

The extent to which a test or instrument measures what it claims to measure accurately.

Expensive

Something that requires a high cost or a large amount of resources to obtain.