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npeelman npeelman
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6 years ago
The auditor has set materiality at XYZ Company of $50,000 based upon a percentage of net assets. The company currently has a small profit (only $3,500). Which of the following items would the auditor most likely consider to be material and request an account balance adjustment?
A) a misclassification between accounts receivable and accounts payable of $10,000
B) incorrect allocation of a note payable to current rather than long term
C) poor wording in a note to the financial statements, making it a bit difficult to understand
D) an understatement of depreciation expense, which would increase depreciation by $5,000
Textbook 
Auditing: The Art and Science of Assurance Engagements, Canadian Edition

Auditing: The Art and Science of Assurance Engagements, Canadian Edition


Edition: 12th
Authors:
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victroxvictrox
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6 years ago
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npeelman Author
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#2
5 years ago
Thanks man
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