The client's compliance with contractual requirements of operating agreements is an example of a qualitative factor that may cause misstatements of quantitatively immaterial amounts to be considered material.

Question

Quizplus · Accepted Answer

Compliance with contractual agreements may be deemed necessary for the integrity and accuracy of financial statements, even if the dollar amounts involved are not significant. Therefore, failure to comply with such agreements may be considered material.

The Client's Compliance with Contractual Requirements of Operating Agreements Is