There Are Often a Large Number of Immaterial Errors Discovered

question 47

Multiple Choice

There are often a large number of immaterial errors discovered that do not require an adjustment at the time they are found.How should these errors be dealt with by the auditor?

• A)Since these items are individually immaterial,the auditor would not recommend adjusting entries to the client.
• B)Since there are a large number of these,the auditor would recommend adjusting entries to the client.
• C)The auditor must combine the individually immaterial errors and evaluate whether the combined amount is material.
• D)The auditor would never combine these individually immaterial amounts because that would mix apples and oranges.

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Definitions:

Time And Material Pricing

A pricing method that charges the customer based on the actual time spent and materials used on a project.

Labour Charge

The amount paid for the work performed by employees or workers, typically based on hours worked or tasks completed.

Overhead Costs

Expenses related to the day-to-day running of a business that cannot be directly linked to a specific product or service.

Time Charge

A billing method where a service provider charges a client based on the amount of time spent on a particular task or project.