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:

Aided Recall

Occurs when consumers recognize a name (e.g., of a brand) that has been presented to them.

Brand

A name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers.

Marketing Researcher

A professional who studies market conditions, trends, and consumer behaviors to improve marketing strategies and product development.

Top-of-Mind Awareness

The first brand or product that comes to a consumer's mind when thinking about a particular industry or category.