A misstatement is defined as _______.
A)the auditor incorrectly billing the client for work that was not performed
B)a difference between what is reported in the client prepared financial statements with what is required for the item to be presented fairly in accordance with the applicable financial reporting framework
C)there being no difference between what is reported in the client prepared financial statements and what is required for the item to be presented fairly in accordance with the applicable financial reporting framework
D)variances that only occur in the interim financial statements

Question

Quizplus · Accepted Answer

A misstatement is a difference between what is reported in the client prepared financial statements with what is required for the item to be presented fairly in accordance with the applicable financial reporting framework. Therefore, option B is the correct definition of a misstatement. Option A refers to incorrect billing practices and is not related to misstatements in financial statements. Option C is incorrect because if there is no difference between what is reported in the financial statements and what is required, then there is no misstatement. Option D is incorrect because misstatements can occur in both interim and annual financial statements.

A Misstatement Is Defined as _______