Which of the Following Is Not a Factor Adding to the Complexity

question 77

Multiple Choice

Which of the following is not a factor adding to the complexity of materiality judgments made by auditors?

• A) Regulators pay particular attention to the judgmental aspects of auditor materiality decisions.
• B) SEC regulators do not believe it is appropriate to use percentage terms to substitute for a full analysis of all relevant considerations regarding the magnitude of misstatement.
• C) Regulators focus on how materiality decisions can affect client financial results.
• D) SEC regulators have few requirements for auditors to comply with since the AICPA fills that role.

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Definitions:

Cannon-Bard Theory

A theory of emotion that proposes emotions and bodily responses occur simultaneously, rather than one causing the other.

Heart Begins Pounding

A physiological response typically associated with intense emotions, stress, or physical exertion, leading to an increased heart rate.

James-Lange Theory

A hypothesis suggesting that emotions are the outcome of physical responses to occurrences.

Two-Factor Theory

A psychological theory that proposes that emotions are based on physiological arousal and cognitive labels.