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marishachu [46]
3 years ago
6

An auditor has determined a $10 million materiality level for a client's balance sheet and a $3 million materiality level for th

e client's income statement. As a result, the auditor will consider items in the audit to be material if they individually or collectively could result in a misstatement of____________.
A. $6.5 million or more
B. $10 million or more
C. Unknown; impossible to determine from information given
D. $3 million or more
Business
2 answers:
wlad13 [49]3 years ago
7 0

Answer:

D. $3 million or more

Explanation:

The International Auditing Standards comments that <u> it is advised in auditing that when there are multiple materialities in an audit, using an average of the materialities will lead to an amount that will be too large for the lower materiality that has been set.</u>

Therefore in the case of this scenario, $6.5 cannot be used because it will be too large for the income statement amounts, hence the advised level is the lower materiality of $3 million.

Andreyy893 years ago
5 0

Answer:

D. $ 3 million or more

Explanation:

Since the minimum materiality amount on individual basis is $3 million for client's income statement.

Therefore, whether it is on individually or collectively identified that there is misstatement of at least $3 Million the auditor will consider it material.

They will notify appropriate authorities regarding the misstatement.

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Suppose you were hired as a consultant for a company that wants to penetrate the Comp-XM market. This company wants to pursue a
klio [65]

Answer:

Chester Company

Explanation:

Niche Cost Leader Strategy is to set the price for the products as lower than all the competitor's products and still be in profit. Thus by having set the lower prices than competitor's products in the market and achieving profit for the organization.

Chester Company is the strong competitor for the Niche Cost Leader Strategy company based on the given information, and the data as explained below.

  • There is very low change in the stock market price ($0.45) and very low variation in closing stock price for the Chester Company. This indicates that the company has stable market stock price.
  • Chester has lowest margins (35.8%) and lowest profits $3,144,115, as compared to other companies where as sales is high ($158,062,285), which is close to other companies of high sale value (Andrew - $211,593,184)
  • Profit of Chester is lowest as compared to other companies, though sale is good. This indicates that the product price is lower than others. Thus it is strong competitor for niche cost leader Strategy Company.
  • Production for the Chester Company is very high against the capacity of the company.

6 0
3 years ago
Modern Railways Co. operates a cargo railroad service between New York and Boston. A train owned by Modern Railways derails due
Fittoniya [83]

Answer:

b. Special damages

Explanation:

Damages are remedies paid to claimants or plaintiffs as compensation for loss or injury caused by the defendant.

Special damages compensate the claimant for quantifiable monetary losses which can be either direct losses or consequential damages. For example the cost of replacement of damaged property is categorized as a direct loss and lost earnings relates to consequential damages.

The $100,000 worth of porcelain that was damaged is a direct loss which may be recovered by CraftCo under special damages.

3 0
3 years ago
Technical Performance Measures should be selected for those parameters that: [Use Technical Performance Measures to track progre
elixir [45]

Answer:

The correct answer is letter "A": Are expected to have the highest degree of risk.

Explanation:

A Technical Performance Measure or TPM is an instrument that shows how well a program meets its specifications or goals. Technical Performance Measures are useful for risk tracking to identify the factors of an objective that can potentially affect the original plan of an organization.

5 0
3 years ago
Which of the following statements is true of strategic alliances as disadvantages? a.The fixed costs and associated risks of dev
ololo11 [35]

They are most beneficial when they join together resources and knowledge in a combination that complies with the VRIO framework.

5 0
3 years ago
All of the following are assumptions of cost-volume-profit analysis except a.the sales mix is constant. b.costs can be divided i
Vikentia [17]

Answer:

d. within the relevant range of operating activity, the efficiency of operations can change.

Explanation:

Cost-volume-profit analysis is also known as the break even analysis, it is an important tool in predicting the volume of activity, the costs to be incurred, the sales to be made, and the profit to be earned is. It is used to determine how changes in differing levels of activities such as costs and volume affect a company's operating income and net income.

Generally, to use the cost-volume-profit analysis, financial experts usually make some assumptions and these are;

1. Sales price per unit product is kept constant.

2. Variable costs per unit product are kept constant and the total fixed costs of production are kept constant i.e costs can be divided into fixed and variable components.

3. All the units produced are sold i.e there is no change in inventory quantities during the period.

5. The costs accrued are as a result of change in business activities.

6. A company selling more than a product should simply sell in the same mix i.e the sales mix is constant.

<em>Hence, the aforementioned are assumptions of cost-volume-profit analysis except that, within the relevant range of operating activity, the efficiency of operations can change.</em>

6 0
3 years ago
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