Auditors May Consider Only Quantitative Effects and Not Qualitative Effects

question 122

True/False

Auditors may consider only quantitative effects and not qualitative effects in making materiality judgments.

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Definitions:

Investment

Applying resources, typically financial, in order to gain income or profit.

Portfolio

An aggregation of financial instruments such as company shares, debt securities, tangible commodities, available cash, and cash-like resources, including mutual funds and ETFs.

Perfectly Positively Correlated

A situation where two variables move in the same direction at the same rate, represented by a correlation coefficient of +1.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, indicating how spread out the values in a data set are.