When Dealing with Materiality

question 137

Multiple Choice

When dealing with materiality,

• A) if the client refuses to correct a material misstatement, the auditor is required to adjust the financial statements.
• B) management is responsible for determining whether financial statements are materially misstated.
• C) materiality must be determined as a percentage of sales.
• D) the auditor must bring any material misstatements to the client's attention.

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Definitions:

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A viewpoint or analysis based on the principles of law and legal understanding.

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The structured hierarchy of courts within a jurisdiction, responsible for administering justice through the application of law.

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The process of resolving disputes and legal conflicts related to business activities through the court system.

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The intermediate appellate courts in the United States federal court system that review decisions made by lower courts.