Most audit firms use a schedule,often referred to as a summary of unadjusted audit differences (SUAD),to accumulate the known and projected misstatements and the carryover effects of prior-year uncorrected misstatements.Which of the following statements regarding this process is false?
A)Individually immaterial misstatements are not entered on the SUAD.
B)Possible adjustments to the financial statements that are left uncorrected are referred to as waived.
C)Tax effects are shown on the SUAD.
D)The nature of the misstatement,as well as the quantitative amount,is considered in the judgment of materiality.

Question

Quizplus · Accepted Answer

Individually immaterial misstatements are often entered on the SUAD because, in aggregate, they could become material. The SUAD is used to track all known and projected misstatements, regardless of their individual size, to assess their collective impact on the financial statements.

Most Audit Firms Use a Schedule,often Referred to as a Summary