Which of the Following Statements Is Usually True

question 35

Multiple Choice

Which of the following statements is usually true?

• A) Materiality is easy to quantify.
• B) Fraudulent financial statements are often easy for the auditor to detect, especially when there is collusion among management.
• C) Reasonable assurance is a low level of assurance that the financial statements are free from material misstatement.
• D) An item is considered material if it would likely have changed or influenced the decisions of a reasonable person using the statements.

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Definitions:

Transaction-Based

Referring to activities, processes, or systems that are triggered by transactions or exchanges between parties.

Process-Oriented

An approach that focuses on the processes within an organization as a means to achieve efficient results and improvement.

Inventory Turnover Effect

A measure of how quickly a company can sell its stock within a given period, indicating the efficiency of inventory management and sales performance.

Return on Investment

A measure of the gain or loss generated on an investment relative to the amount of money invested.