Which of the Following Statements Best Describes a Misstatement

question 17

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 audit report
• 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 company if he knew about the misstatement
• D)some misstatements are neither material nor immaterial

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Definitions:

Internal Revenue Service

The U.S. government agency responsible for tax collection and tax law enforcement.

Annual Revenues

The total income generated by a business or organization from its operations over the course of a year before any expenses are deducted.

Advisory Councils

Groups of experts or stakeholders gathered to provide strategic advice, guidance, and expertise to an organization or entity.

Legal Responsibilities

Obligations that are enforced by law, requiring individuals or organizations to follow specific legal standards and regulations.