When a Client Fails to Follow GAAP, the Audit Report

question 5

Multiple Choice

When a client fails to follow GAAP, the audit report can be unqualified, qualified, or adverse depending on the materiality.What factors affect materiality that an auditor should consider?

• A)The dollar amount in comparison to a base
• B)If the misstatement can be measured
• C)The nature of the item
• D)All the above are factors an auditor should consider regarding materiality.

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Definitions:

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Fine Print

The smaller, often less noticeable text in a contract or document that includes important details and stipulations.

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The seeds from the cannabis plant, which can be cultivated to produce marijuana plants.

Enforceable

A term that describes a legal agreement or contract that can be upheld and compelled by the law.