Which of the Following Statements Is True Regarding Performance Materiality

question 51

Multiple Choice

Which of the following statements is true regarding performance materiality in a monetary unit sampling application?

• A)Performance materiality replaces the overall level of financial statement materiality.
• B)Expected misstatement is the application of performance materiality to a particular sampling procedure.
• C)Performance materiality addresses the risk that the aggregate of individually material misstatements may not cause the financial statements to be materially misstated.
• D)Performance materiality provides auditors with a conservative measure that considers the presence of undetected misstatements.

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Definitions:

Sensory Experience

The immediate, direct experiences gained through the senses of sight, smell, touch, taste, and hearing.

Perceptual Experience

The processing and interpretation of sensory information to understand the environment.

Sedatives

Substances that induce sedation by reducing excitement, irritability, and nervousness, often used to promote calmness and ease anxiety.

Stimulants

Substances that increase alertness, attention, and energy by boosting the activity of the central nervous system.