Which of the Following Is Not a Qualitative Factor That

question 12

Multiple Choice

Which of the following is not a qualitative factor that may affect an auditor's establishment of materiality?

• A) Potential for fraud.
• B) The entity is close to violating loan covenants.
• C) Firm policy sets materiality at five per cent of pre-tax income.
• D) A small misstatement would interrupt an earnings trend.

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Definitions:

Scientific Names

A standardized two-part nomenclature used in biology to uniquely identify species, comprising a genus name followed by a species name.

Common Names

Simplified or non-scientific terms used to refer to species or objects, often varying regionally or culturally.

Unique

Being the only one of its kind; unlike anything else.

Adaptation

The evolutionary process by which organisms become better suited to their environment, leading to changes in traits over generations.