The Auditing Standards Have Listed Several Circumstances That Might Cause

question 83

Multiple Choice

The auditing standards have listed several circumstances that might cause quantitatively immaterial misstatements to be judged material.These include

• A)misstatements that change a loss into income
• B)the effect of the misstatement on compliance with loan covenants,contractual agreements and regulatory provisions
• C)the existence of statutory or regulatory reporting requirements that might have an impact on quantitative levels
• D)misstatements that have the effect of increasing employees' compensation
• E)the effect of misclassifying income between operating and nonrecurring
• F)both A and B
• G)both C and E
• H)both D and E

---

Definitions:

Power Cost

The expense incurred by a company for the electricity used in its operations.

Automotive Engines

The specific units within vehicles that convert fuel into mechanical power, allowing the vehicle to move.

Materials Quantity Variance

The discrepancy between what was actually used in terms of material for production and what was anticipated, times the standard cost for each unit.

Direct Material

Primary materials used in the making of a product that can be directly traced to the finished good.