amount to material misstatement
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
50
Based on professional judgment an auditor establishes that if the amount of error or omission is within 1% of total revenue it is not considered as misstatement. Assume, the amount of service revenue is overstated by OMR 5,000 which is 5% of total revenue. Does it amount to material misstatement?
a.
Yes, as the percentage of materially misstated amount is more than 1% of total revenue
b.
Unable to decide as the data is inadequate
c.
None of the options
d.
No, as the percentage of misstated amount is less than 1% of total revenue
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