Which of the Following Is Not a Concern as to Whether

question 52

Multiple Choice

Which of the following is not a concern as to whether a misstatement is qualitatively material? 

• A)The misstatement hides a failure to meet analysts' expectations.
• B)The misstatement is less than 5% of pretax income.
• C)The misstatement increases management's compensation.
• D)The misstatement changes a small amount of profit to a small reported loss.

---

Definitions:

Gross Profit

The difference between revenue and the cost of goods sold, reflecting the core profitability of a company's operations.

Operating Expenses

Costs related to the normal day-to-day operations of a business, excluding the cost of goods sold.

Cost Of Goods Sold

The total cost directly associated with producing or acquiring the goods sold by a company during a specific period.