Defining notable items depends on _______.
A)the assertion being audited, and the auditor's understanding of the business and industry.
B)the assertion being audited only
C)the auditor's understanding of the business and industry only
D)neither the assertion being audited, nor the auditor's understanding of the business and industry.

Question

Quizplus · Accepted Answer

Defining notable items depends on both the assertion being audited and the auditor's understanding of the business and industry. The auditor needs to understand the business and industry to identify potential risks and significant transactions, and then use this understanding to assess the materiality of those items for the financial statement audit.

Defining Notable Items Depends on _______