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When comparing misstatements with a measurement base, the auditor must consider the pervasiveness of ...

When comparing misstatements with a measurement base, the auditor must consider the pervasiveness of the misstatement. Of the following examples, the most pervasive misstatement is a(n)

▸ understatement of inventory.

▸ understatement of retained earnings caused by a miscalculation of dividends payable.

▸ misclassification of notes payable as a long-term liability when it should be current.

▸ misclassification of salary expense as a selling expense.

Textbook

Auditing and Assurance Services

Edition: 17^th

Authors: Arens, Elder, Beasley, Hogan

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