Which Statement Is True Concerning Materiality

question 45

Multiple Choice

Which statement is true concerning materiality?

• A)Misstatements are material if they could reasonably be expected to influence the decisions of users of the financial statements.
• B)Materiality guidelines are specifically prescribed by the PCAOB.
• C)Materiality is not a useful concept in assessing internal control effectiveness.
• D)Materiality is a concept applied to financial statement presentation but not to disclosures.

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Definitions:

Psychotherapy

A therapeutic treatment involving psychological methods, particularly when based on regular personal interaction, to help a person change behavior and overcome problems.

Frustration-Regression Hypothesis

A principle suggesting that when people encounter obstacles to reaching a goal, they may regress to previous behaviors that are comfortable but less productive.

ERG Theory

A motivation theory developed by Clayton Alderfer that categorizes human needs into three groups: Existence, Relatedness, and Growth.

Social Support

The perception and actuality of assistance and emotional encouragement received from others, which can significantly impact mental health and resilience.