Last Year the Materiality for the Client Was $590 000

question 60

Multiple Choice

Last year the materiality for the client was $590 000.This year it is $400 000.All things being equal,how will this change in materiality affect the extent of tests of details?

• A)increase
• B)decrease
• C)no effect as the tests of controls will be increased
• D)no effect as the tests of controls will be decreased

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Definitions:

Collectivism

A cultural value that emphasizes the importance of groups and collective action, often prioritizing the needs and goals of the group over individual desires.

Social Categorization

The practice of organizing individuals into categories based on common traits such as race, gender, or nationality.

Cognitive Error

A mistaken thought process leading to misjudgment or irrational decision-making.

Self-handicapping

A cognitive strategy by which people avoid effort in the hopes of keeping potential failure from hurting self-esteem.