Which of the Following Is the Least Likely Outcome When

question 76

Multiple Choice

Which of the following is the least likely outcome when the upper limit on misstatements exceeds the tolerable misstatement?

• A)The auditor would be exposed to the risk of incorrect rejection.
• B)The auditor would be exposed to an efficiency loss.
• C)The auditor would consider expanding the sample to evaluate additional transactions or components of the account balance.
• D)The auditor would conclude that the account balance is fairly stated.

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Definitions:

Indefinite Time

Indefinite Time indicates a period without a specified end date.

Research Costs

Expenditures related to activities undertaken to gain new knowledge or understanding to develop new products, processes, or services; often a significant part of a company's innovation efforts.

Capitalized

In accounting, this term refers to recording an expense or cost as a capital asset on a balance sheet, rather than as an expense on the income statement.

Tangible Asset

Physical assets that can be touched and have a finite monetary value, such as buildings, machinery, and equipment.