Which of the following is true about the term "likely misstatement?"

Question

Quizplus · Accepted Answer

Choice "A" is correct. A "likely misstatement" is one that has not been specifically identified, but which is likely to exist based on the auditor's judgment. Choice "B" is incorrect. "Likely misstatement" does not refer to the cumulative effect of prior year errors. It is a measure of misstatements the auditor considers likely to exist, that have not been specifically identified. Choice "C" is incorrect. "Likely misstatement" is a measure of misstatements the auditor considers likely to exist, that have not been specifically identified. Choice "D" is incorrect. The term "likely misstatement" includes only an estimate of potential errors. It does not include specific misstatements identified during the audit.

Which of the Following Is True About the Term "Likely