Which of the following statements is not correct about materiality?
Correct answer: D. At the planning state, the auditor considers materiality at the financial statement level only
- A. Materiality is a relative concept
- B. Materiality judgments involve both quantitative and qualitative judgments
- C. Auditor's consideration of materiality is influenced by the auditor's perception of the needs of an informed decision maker who will rely on the financial statements
- D. At the planning state, the auditor considers materiality at the financial statement level only
Explanation
Materiality is considered both for the financial statements as a whole and for particular account balances, classes of transactions, or disclosures. Therefore, saying that planning considers only the financial-statement level is incorrect.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
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.
Practise Auditing
162 free Auditing MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Accounting questions like this
Accounting is on 2 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.