A principle that is concerned with information that should be significant enough to affect evaluations and decisions is called? * O Consistency O Historical cost O Materiality O Adequate disclosure OExpense recognition

A principle that is concerned with information that should be significant enough to affect evaluations and decisions is called? * O Consistency O Historical cost O Materiality O Adequate disclosure OExpense recognition

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 16MCQ

See similar textbooks

Related questions

Q: In order to be relevant, financial information must have O neutrality. O confirmatory or predictive…

A: Financial information is the information regarding the financial aspects of business and this…

Q: The two characteristics of the appropriateness of evidence are a. relevance and reliability. b.…

A: The management of the company is the main responsible for preparing the financial statements which…

Q: Explain how materiality differs for failure to follow GAAP and for lack of independence.

A: Generally Accepted Accounting Principles (GAAP): Generally Accepted Accounting Principles are the…

Q: The assessment of materiality and the relative importance of quantitative and qualitative factors in…

A: Audit means to check out whether the financial statements reveals the true picture or not and what…

Q: What type of audit opinion is preferred when analyzing fi nancial statements? C . Unqualifi ed.

A: Audit opinion: Audit opinion can be defined as an opinion formed by an independent auditor based…

Q: What are the auditor's responsibilities for 'going concern assumptions’'?

A: The going concern is an accounting assumption where it is assumed that the business will be carried…

Q: Inquiry and observation are applicable to gather evidence about a policy or procedures that does not…

A: Solution : Concept Inquiry Inquiry as process of audit means the process of seeking…

Q: identify characteristics of a coherent fi nancial reporting framework and the barriers to creating…

A: Introduction: The structure for the financial reports specifies the collection of standards and…

Q: When there is agreement between a measure or description and the phenomenon it purports to…

A: Financial accounting: Financial accounting is the process of recording, summarizing, and reporting…

Q: In a review engagement, the CPA issues a report with: a-moderate assurance. b-limited…

A: review engagement provides moderate level of assurance that the information subject to review is…

Q: Explain how the retrospective approach offers consistency and comparability.

A: Retrospective approach is the principle in which previously issued financial statements are recasted…

Q: e the use of pro forma statements in informed decision-making?

A: Step 1When it comes to accounting, pro forma statements are the financial statements of your…

Q: This enhancing characteristic requires that users be well-informed and diligent for information to…

A: Relevance: Relevance refers to how helpful the information is for the financial decision-making…

Q: Define emphasis-of-matter and other-matter paragraphs. What type of information do auditorsprovide…

A: Emphasis-of-matter: This is a type of paragraph in an auditor's report on the financial statement.…

Q: ctiveness and audi

A: Given: To explain the association of audit committee effectiveness and quality after adoption of…

Q: Which of the following is not a characteristic of a coherent fi nancial reporting framework? B .…

A: Coherent financial reporting framework is a reporting framework which requires that a reporting…

Q: What kind of information is gathered from a valid and trusted source and can be depended upon to be…

A: Accounting information is very useful information which is being collected for the purpose of…

Q: Neutrality of information in the fi nancial statements most closely contributes to which qualitative…

A: The qualitative characteristic of the financial information refers to that attribute of the…

Q: explain why the author's assessment of the appropriateness of the going concern assumptions is so…

A: Going Concern Assumption- As per the going concern assumption business will continue its…

Q: The quality of information that gives assurance that it is reasonably free of error and bias and…

A: Faithful representation refers that financial statement is free from material error.

Q: Enhancing Qualities Fundamental Usefulness Qualities Relevance Consistency Understandability…

A: Accounting information is the information collected through the business transactions. After…

Q: If an analytical procedure supports management representations, it provides O key item evidence.…

A: Option A: Incorrect Key item evidence : when auditor audit specific items which are important for…

Q: When a second independent, qualified individual provides the same information, the _____ improves.…

A: Accounting information is very important and useful for various stakeholders. These users or…

Q: Comparability, understandability, timeliness, and verifiability are enhancing qualitative…

A: Answer:- Qualitative characteristics of accounting information that must be present for information…

Q: Which among the following is a form related attribute of good information? a. Relevance b.…

A: The attribute of good information are: Accuracy Completeness Consistency Uniqueness Timeliness

Q: Independence

A: Code of ethics for professional accountants: The code of ethics states that the accountant should…

Q: Identify AND explain its historical significance of: "Strict Accountability

A: Managers in public agencies need to focus their attention on the priorities of those at the top of…

Q: a) Explain why determination of materiality is a matter of auditor judgment. Refer to both…

A: Since you have asked multiple questions we will solve the first question for you,If you want any…

Q: To be useful, information must have which of the following fundamental qualitativecharacteristics?a.…

A: To determine the useful information must have the following fundamental qualitativecharacteristics…

Q: To achieve faithful representation, the financial information must be: relevant, comparable, and…

A: Lets understand the meaning of faithful representation in short. It is a representation which should…

Q: What is meant by each of the following potential characteristics of information: relevant, accurate,…

Q: oncepts of “Relevance” and “Representational Faithfulness”

A: SOLUTION:- Relevance means the potential of information or facts to make a distinction in decision.…

Q: Which qualitative characteristic is an ingredient of relevance? O understandability O materiality O…

A: Answer

Q: The primary qualities that make accounting information useful for decision-making are :(a) Relevance…

A: Accounting information: Accounting information refers to the data or the information about the…

Q: relate to merit system practices would you say that the system works well why or why not present…

A: The system of merit ensures that the selection is grounded on the ability of the person only to…

Q: Explain how materiality differs for failure to follow GAAP and for lack of independence.

A: Auditing means the inspection of financial accounts of the company to determine if the records are…

Q: Adequate disclosure in financial statements to meet the needs and purposes of their users is a means…

A: Financial statements are the reports that are to be prepared by the entity in order to disclose its…

Q: Which qualitative characteristic is an ingredient of relevance? a. Verifiability b. Timeliness c.…

A: As per general accounting principal, financial statements of an entity should be true and fair. In…

Q: hether or not a report is effective?

A: To evaluate an organization's strategy's performance and efficiency, consider how it ties your goals…

Q: An information which provides feedback about previous evaluations is regarded as having. a.…

A: Qualitative characteristics of accounting information must be present for information to be useful…

Q: Only sets of non-nominal items that presumably belong to reflective latent factors are acceptable…

A: Definition: Analysis of Factors (EFA): An experiment's variables are analyzed using statistical…

Q: Which of the following is NOT a characteristic of effective information? a. relevance b. accuracy c.…

Q: tiveness to knowledge? Also mention empirical evidence.

A: Inventiveness : The ability to create something new or to innovate and imagine is called…

Q: describe presentation choices, including non-GAAP measures, that could be used to infl uence an…

A: There is very nothing new during this reading, simply a review of the previous material. heaps of…

Question

A principle that is concerned with information that should be significant
enough to affect evaluations and decisions is called? *
O Consistency
O Historical cost
O Materiality
O Adequate disclosure
Expense recognition

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Information that has the ability to make a difference in the decision-making process is known to possess this quality? relevance verifiability understandability faithful representation
When is a subject matter considered appropriate? a. Identifiable, and capable of consistent evaluation or measurement against the identified criteria. b. The information about it can be subjected to procedures and for gathering of sufficient appropriate evidence to support a conclusion. c. Either a or b. d. Both a and b. explain why
Comparability, understandability, timeliness, and verifiability are enhancing qualitative characteristics that contribute to: Relevance Faithful Representation a. Yes No b. No No c. No Yes d. Yes Yes
Which qualitative characteristic is an ingredient of relevance? a. Verifiability b. Timeliness c. Neutrality d. Representational Faithfulness
explain why the author's assessment of the appropriateness of the going concern assumptions is so important. answer in detail
What is meant by each of the following potential characteristics of information: relevant, accurate, and timely? Is objective information always relevant? Accurate?
Neutrality of information in the fi nancial statements most closely contributes to which qualitative characteristic? C . Faithful representation.
Independence is required in performing review, agreed-upon procedures, and compilation. True or False?
describe presentation choices, including non-GAAP measures, that could be used to infl uence an analyst’s opinion
To be useful, information must have which of the following fundamental qualitativecharacteristics?a. Relevance and faithful representationb. Timeliness and affordabilityc. Expediency and relevanced. Faithful representation and diversity
Which is the first step within the hierarchy of guidance when selectingaccounting policies? A. Apply a standard from PFRS if it specifically relates to the transaction B. Apply the requirements in PFRS dealing with similar and related issue C. Consider the applicability of the definitions, recognition criteria and measurement concepts in the Conceptual Framework D. Consider the most recent pronouncements of other standard setting bodies
As stipulated in the Conceptual Framework 2018, materiality is therefore an entity-specific aspect to ensure relevant information based on the _______ or _______ of items to which the information relates. Fill in the correct words to complete the sentence? 1) disclosure or amount 2) value or balance 3) nature or magnitude 4) faithful presentation or completeness