ACCA AA · Chapter 13 · Question 6 of 12
Under ISA 705, which of the following would NOT make the effects of a misstatement pervasive?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) The misstatement is confined to a single account balance that is not a substantial proportion of the financial statements
Explanation
ISA 705 defines pervasive effects as those not confined to specific elements, or if confined, representing a substantial proportion of the financial statements, or relating to disclosures fundamental to users' understanding. A misstatement in one account that is not a substantial proportion is material at most, not pervasive.
More Misstatements and the auditor's report MCQs
- Q8Which of the following best describes when an Emphasis of Matter paragraph is used under ISA 706?
- Q9Under ISA 701, from which matters does the auditor select key audit matters?
- Q10The auditor of Hasp Co concludes that the going concern basis is appropriate, but that a material uncertainty exists which is adequately…
- Q11Management of Jarvey Co has prepared financial statements on a going concern basis, but the auditor concludes that the company will cease…
- Q12Under ISA 700, which of the following is included in the Basis for Opinion section of the auditor's report?