Misstatements Are Usually Considered Material If The

question 75

Multiple Choice

Misstatements are usually considered material if the:

• A) combined uncorrected errors in the financial statements are likely to have changed or influenced the decisions of a reasonable person using the financial statements.
• B) auditor has quantified a measure of materiality.
• C) combined uncorrected errors and fraud in the financial statements are likely to have changed or influenced the decisions of a reasonable person using the financial statements.
• D) none of the above

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Definitions:

General Supply

Refers to the overall provision or stock of resources, goods, or equipment that is available for use.

Managed by Shareholders

An organizational structure in which the owners (shareholders) of a firm take an active role in the management decisions.

Legal Entity

An organization or business that has legal rights and obligations, including the ability to enter into contracts and sue or be sued.

Sued and to Sue

Refers to the legal capacity of an individual or entity to bring a lawsuit or to be subject to a lawsuit in a court of law.