Reference no: EM132613070

Problem 1: In the audit of ABC Company, where materiality was assessed as $15,000, three misstatements were detected: an improper asset capitalization of $18,000, an employee theft of $5,000, and a $5 posting error. In accordance with CAS 260, the auditor must report which of these misstatements to the audit committee?

Option a. Both the $18,000 and $5,000, but not the $5 error.

Option b. None of the misstatements need to be reported to the audit committee, just to an appropriate level of management.

Option c. Only the $18,000 misstatement.

Option d. All three misstatements must be reported.