Which of the following relatively small misstatements would most likely have a material effect on an entity's financial report?
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 authorised.
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, are considered material due to their nature. They could indicate significant legal and ethical issues within the entity, potentially affecting the entity's operations and reputation significantly.

Which of the Following Relatively Small Misstatements Would Most Likely