In Considering Materiality for Planning Purposes, an Auditor Believes That

question 79

Multiple Choice

In considering materiality for planning purposes, an auditor believes that misstatements aggregating $10,000 would have a material effect on an entity's income statement, but that misstatements would have to aggregate $20,000 to materially affect the balance sheet. Ordinarily, it would be appropriate to design auditing procedures that would be expected to detect misstatements that aggregate:

• A) $10,000
• B) $15,000
• C) $20,000
• D) $30,000

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Definitions:

Task Variety

The degree to which a job or role involves a range of different activities requiring various skills and talents.

Job Characteristics Model

A theory that proposes that the nature of one's job can affect job satisfaction, and identifies five core job dimensions that can motivate individuals and enhance job satisfaction.

Core Job Characteristics

Fundamental attributes of a job that affect employee motivation and job satisfaction, including skill variety, task identity, task significance, autonomy, and feedback.

Fixed Price

A pricing strategy where the cost of a product or service is not subject to change under any circumstances.