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Qualitative Factors Can Affect an Auditor's Assessment of Materiality

question 58

Multiple Choice

Qualitative factors can affect an auditor's assessment of materiality. Which of the following qualitative factors could influence the assessment of materiality?
I. Misstatements that are otherwise immaterial may be material if they affect earnings trends.
II. Minor misstatements resulting from the consequences of contractual obligations.


Definitions:

Total Revenue

The complete amount of income generated by the sale of goods or services before any costs are subtracted.

Production Data

Information related to the process of manufacturing or creating goods and services.

Sales Data

Information collected about the sales of products or services, used for analysis and business planning.

Total Cost

The complete cost of production or operation, combining both fixed and variable expenses.

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