When preparing financial statement, accountants or auditors will determine an amount which is not significant, and any error or omission of the transaction below that amount can be ignored when preparing financial statements. This refers to Cost constraint B Faithful representation C) Relevant D Materiality

When preparing financial statement, accountants or auditors will determine an amount which is not significant, and any error or omission of the transaction below that amount can be ignored when preparing financial statements. This refers to Cost constraint B Faithful representation C) Relevant D Materiality

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter17: Other Services Provided By Audit Firms

Section: Chapter Questions

Problem 3TFQ

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Similar questions

When an event impacts a financial statement element, it should be recognized in the accounting records even if reliability of the amount is questionable. True False
Give an example of an error that occurs on one of the financial statements and the error flows through to a different financial statement.
Under the Conceptual Framework for Financial Reporting which of the following statements is not a feature of financial information’s “comparability” characteristics? Comparability is uniformity A comparison requires at least two items Consistency, although related to comparability, is not the same Comparability is the goal; consistency helps to achieve that goal
Information is immaterial if omitting it or misstating it could influence decisions that users make on the basis of the financial information of a specific reporting entity. True False
Auditors commonly allocate materiality to balance sheet accounts rather than income statement accounts because most income statement misstatements have a effect on the balance sheet. Select one: a. equal b. undetermined C. increased d. reduced O O O
How do you make adjustments for a non-counter balancing error and does it affect the present financial statements?
In IFRS, the conceptual framework indicates appropriate accounting when a more specific accounting standard does not apply. True False
The primary qualities that make accounting information useful for decision-making are :(a) Relevance and freedom from bias(b) Reliability and comparability(c) Comparability and consistency(d) None of the above
Which of the following is not an advantage of accounting standards? Select one: a. All of the given answers are correct. b. It reduces the reliability of financial statements. c. It helps to attain uniformity in accounting. d. It provides guidance on the content and presentation of financial statements.
Comment on the statement that materiality is in the eye of the beholder. How does this statement relate to the discussion in this chapter of how to gauge materiality in assessing financial statement restatements? Is materiality inconsistent with the notion of representational faithfulness?
Which of the following is the best description of reliability in relation to information in financial statements? Comprehensibility to users Influence on the economic decisions Freedom from material error and bias Inclusion of degree of caution of users
Assuming that the data collected in the accounting information system is free from material errors but the processing of such data is inappropriate, would it still be possible to generate correct accounting information under these circumstances? If yes, how? If no, why?