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:

Confederates

Individuals who appear to be participants in a study but are actually part of the research team, used to manipulate social interactions.

Self-Fulfilling Prophecy

A prediction that directly or indirectly causes itself to become true, due to positive feedback between belief and behavior.

Diffusion Of Responsibility

A sociopsychological phenomenon where individuals are less likely to take action or feel a sense of responsibility in the presence of a large group of people.

Likert Scale

A psychometric scale commonly used in questionnaires to gauge attitudes, values, or responses, where participants specify their level of agreement to a statement.