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Explain How Auditors Decide Whether or Not a Misstatement They

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Essay

Explain how auditors decide whether or not a misstatement they encounter in the financial report is material.For example, in auditing ZZZ Pty Ltd, it is discovered that stock is overstated by $300 000.Is this material?


Definitions:

Psychological Processes

Activities of the mind that involve receiving, processing, storing, and retrieving information.

Consciously Experiencing

The process of being aware of and directly perceiving events, emotions, and thoughts in the present moment.

Denial

Not acknowledging unconscious content.

Unconscious Content

Elements within the mind that a person is not directly aware of but that influence emotions and behavior.

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