The auditing standards have listed several circumstances that might cause quantitatively immaterial misstatements to be judged material.These include
A)misstatements that change a loss into income
B)the effect of the misstatement on compliance with loan covenants,contractual agreements and regulatory provisions
C)the existence of statutory or regulatory reporting requirements that might have an impact on quantitative levels
D)misstatements that have the effect of increasing employees' compensation
E)the effect of misclassifying income between operating and nonrecurring
F)both A and B
G)both C and E
H)both D and E

Question

Quizplus · Accepted Answer

Circumstances such as changing a loss into income and affecting compliance with loan covenants or contractual agreements are considered significant enough to render quantitatively immaterial misstatements material, as they can significantly alter the perception of the financial health or compliance status of an entity.

The Auditing Standards Have Listed Several Circumstances That Might Cause