Which of the Following Is an Incorrect Statement Regarding the Allocation

question 145

Multiple Choice

Which of the following is an incorrect statement regarding the allocation of the preliminary judgment about materiality to balance sheet accounts?

• A) Auditors expect certain accounts to have more misstatements than others.
• B) The allocation has virtually no effect on audit costs because the auditor must collect sufficient appropriate audit evidence.
• C) Auditors expect to identify overstatements as well as understatements in the accounts.
• D) Relative audit costs affect the allocation.

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