Which of the Following Statements Best Describes a Misstatement

question 97

Multiple Choice

Which of the following statements best describes a misstatement?

• A)a misstatement is either an error (an unintentional mistake)or fraud (an intentional mistake)in the financial statements
• B)some management misstatements are material and some management misstatements are too small to be material
• C)when a statement is material,an outsider would change his decision regarding the audit if he knew about the misstatement
• D)some misstatements are neither material nor immaterial

---

Definitions:

Recurrent

Occurring repeatedly or periodically; characterized by a pattern of coming back or happening again after intervals of time.

Illness

A state of being in poor health, either physically or mentally, due to disease, injury, or other health conditions.

Catharsis Hypothesis

The theory that expressing or experiencing strong emotions leads to a reduction in emotional tension and a state of psychological relief.

Provokes

Stimulates or gives rise to a reaction or emotion, typically a negative one, in someone.