Orange Corp. has a few large accounts
receivable that total P2,000,000. Yellow
Corp. has a large number of small accounts
receivable that also total P2,000,000. The
importance of an error in any one account is,
therefore, greater for Orange Corp. than for
Yellow Corp. This is an example of the
auditor's concept of:
a. Materiality.
b. Reasonable assurance.
c. Comparative analysis
d. Relative risk
receivable that total P2,000,000. Yellow
Corp. has a large number of small accounts
receivable that also total P2,000,000. The
importance of an error in any one account is,
therefore, greater for Orange Corp. than for
Yellow Corp. This is an example of the
auditor's concept of:
a. Materiality.
b. Reasonable assurance.
c. Comparative analysis
d. Relative risk