Which of These Is Not a Source of Potential Misstatement

question 42

Multiple Choice

Which of these is not a source of potential misstatement for the function of recording a payment?

• A) a cheque may be issued for unauthorised purchases.
• B) a cheque may not be recorded promptly.
• C) errors may be made in recording cheques.
• D) all of the above are sources of potential misstatement for the function of recording a payment

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Definitions:

Survivorship Bias

Bias in the average returns of a sample of funds induced by excluding past returns on funds that left the sample because they happened to be unsuccessful.

Self-Selection Bias

Refers to the bias introduced into research results when individuals select themselves into a group, causing a non-random sample.

Statistical Arbitrage

Use of quantitative systems to uncover many perceived misalignments in relative pricing and ensure profit by diversifying across all of these small bets.

Quantitative Techniques

Mathematical and statistical methods used to analyze numerical data, often applied in economics, finance, and operational research to facilitate decision-making.