Which of the Following Statements Is Correct

question 1

Multiple Choice

Which of the following statements is correct?

• A)In compliance audits, an error is considered material if it results in a misstatement in the financial report of more than 10 per cent of net profit.
• B)In compliance audits, control deviations are considered material if the control has not been followed in more than 10 per cent of sample transactions.
• C)In compliance audits, materiality should be determined by reference to the users of the auditor's report and their information needs.
• D)Compliance audits are concerned only with deviations from legislation.

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Definitions:

Vocabulary

The set of words known and used by a person in a language.

Functional Fixedness

A cognitive bias that limits a person to using an object only in the way it is traditionally used, hindering problem-solving and creativity.

Algorithm

A specific set of rules or processes to be followed in calculations or problem-solving operations, especially by a computer.

Heuristic

A problem-solving approach using practical methods or various shortcuts to produce solutions that may not be optimal but are sufficient for immediate goals.