CA Inter P5 · Chapter 8 · Question 7 of 13
Under SA 705, which of the following describes effects that are 'pervasive'?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Effects that are not confined to specific elements, or if confined represent a substantial proportion of the financial statements, or relate to disclosures fundamental to users' understanding
Explanation
SA 705 defines pervasive effects as those that, in the auditor's judgment, are not confined to specific elements, accounts or items; or if so confined, represent or could represent a substantial proportion of the financial statements; or in relation to disclosures, are fundamental to users' understanding.
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