During the Course of an Audit,immaterial Misstatements May Be Detected

question 72

Multiple Choice

During the course of an audit,immaterial misstatements may be detected.The auditor should do which of the following?

• A)permanently pass on these immaterial misstatements as they do not individually impact the financial statements.
• B)request that management footnote the immaterial misstatements in the financial statements for fair presentation.
• C)accumulate all of the known and projected misstatements to determine if the impact is material in the aggregate.
• D)roll them forward for three years when they will become material enough to adjust.

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Definitions:

Consumer Protection Act

A law designed to safeguard consumers from unfair, deceptive, or predatory business practices and to ensure fair trade competition.

TED Spread

The difference between the interest rates on short-term US government debt and interbank loans, indicating credit risk in the general economy.

LIBOR

The London Interbank Offered Rate, representing the interest rate banks charge each other for short-term loans.

Treasury-Bill Rate

The yield or interest rate on U.S. government short-term debt instruments, such as treasury bills, which are considered among the safest investments.