Misstatements Must Be Compared with Some Measurement Base Before a Decision

question 103

Multiple Choice

Misstatements must be compared with some measurement base before a decision can be made about materiality. A commonly accepted measurement base includes

• A) net income.
• B) total assets.
• C) working capital.
• D) all of the above.

---

Definitions:

Lower Cost

Reducing expenses or the amount of resources required to produce goods or services, often to maintain competitiveness or increase profitability.

Interrole Conflict

A psychological conflict arising from opposing demands related to different roles played by an individual.

Values

Core beliefs or principles that guide an individual's behavior and decision-making process.

Attitude

A psychological tendency expressed by evaluating a particular entity with some degree of favor or disfavor.