When determining whether an exception is highly material,the extent to which the exception affects different parts of the financial statements must be considered.This is referred to as
A)materiality.
B)pervasiveness.
C)financial analysis.
D)ratio analysis.

Question

Quizplus · Accepted Answer

Pervasiveness refers to the extent to which an exception affects different parts of the financial statements. This is an important factor in determining the materiality of an exception. Materiality refers to the magnitude of an exception and its impact on the decision-making process of financial statement users. Financial analysis and ratio analysis may be used to analyze financial statements, but they are not directly related to determining the materiality of exceptions.

When Determining Whether an Exception Is Highly Material,the Extent to Which