Which of the following relatively small misstatements most likely would have a material effect on an entity's financial statements?
A)An illegal payment to a foreign official that was not recorded.
B)A piece of obsolete office equipment that was not retired.
C)A petty cash fund disbursement that was not properly authorized.
D)An uncollectible account receivable that was not written off.

Question

Quizplus · Accepted Answer

Illegal payments, such as bribes to foreign officials, even if small, can have a material effect on the financial statements due to the legal and reputational implications they carry, affecting stakeholders' perception and potentially leading to significant fines and sanctions.

Which of the Following Relatively Small Misstatements Most Likely Would