Chapter_9_answers_to_review_questions - Review Questions...

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Review Questions 9-2 Materiality is defined as: the magnitude of an omission or misstatement of accounting information that, in light of the surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would have been changed or influenced by the omission or misstatement. "Obtain reasonable assurance," as used in the audit report, means that the auditor does not guarantee or insure the fair presentation of the financial statements. There is some risk that the financial statements contain a material misstatement. 9-6 The following qualitative factors are likely to be considered in evaluating materiality: a. Amounts involving fraud are usually considered more important than unintentional errors of equal dollar amounts. b. Misstatements that are otherwise minor may be material if there are possible consequences arising from contractual obligations .
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This note was uploaded on 02/19/2012 for the course ACCOUNTING 320 taught by Professor Rich during the Fall '12 term at Columbia College.

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Chapter_9_answers_to_review_questions - Review Questions...

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