An approach that quantifies the total likely misstatement as of the current year-end based on the effects of reflecting all misstatements existing in the balance sheet at the end of the current year including those that occurred in prior years is referred to as:
A)Evaluation materiality approach.
B)Iron curtain approach.
C)Projected misstatement approach.
D)Rollover approach.

Question

Quizplus · Accepted Answer

The Iron Curtain approach quantifies the total likely misstatement by considering the cumulative effects of all misstatements in the balance sheet at the end of the current year, including those from prior years. This approach focuses on the aggregate impact of errors, regardless of when they occurred, to assess their significance on the current period's financial statements.

An Approach That Quantifies the Total Likely Misstatement as of the Current