In determining the level of materiality for an audit, what should not be considered?
Correct answer: B. The auditor's remuneration
- A. Prior year's errors
- B. The auditor's remuneration
- C. Adjusted interim financial statements
- D. Prior year's financial statements
Explanation
Materiality is based on the likely effect of misstatements on users of the financial statements, using information such as prior errors and current financial statements. The auditor's remuneration is not a basis for setting materiality.
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About Auditing
Auditing examines accounting records and financial statements to determine whether they present a reliable and fairly stated position. The subject covers audit objectives, internal controls, audit evidence, materiality, vouching, verification, working papers, auditor independence, audit reports, and the distinction between an audit and accounting or investigation.
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