An auditor has discovered a misstatement in the financial statements that manage

Question

An auditor has discovered a misstatement in the financial statements that management refuses to correct. Regarding this misstatement, which of the following statements is true?

A. If the amount of the misstatement is less than performance materiality but more than the posting threshold, then the misstatement should be included on the Summary of Uncorrected Misstatements.

B. If the amount of the misstatement is more than performance materiality but less than the posting threshold, then the misstatement should be included on the Summary of Uncorrected Misstatements.

C. If the amount of the misstatement is less than both performance materiality and the posting threshold, then the misstatement should be included on the Summary of Uncorrected Misstatements.

D. If the amount of the misstatement is less than performance materiality, then the misstatement is considered trivial and can be ignored.

E. None of the above.

Explanation / Answer

D. If the amount of the misstatement is less than performance materiality, then the misstatement is considered trivial and can be ignored.
If the amount at or below $50,000 are considered trivial and mistatement below that amount can be ignored.

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