When the auditor evaluates the effect of a change in accounting principle, the materiality of the change should be evaluated based on:
A) the effect on total assets.
B) the prior years presented.
C) guidelines included in auditing standards.
D) the current year effect of the change.

Question

Quizplus · Accepted Answer

The materiality of a change in accounting principle should be evaluated based on the current year effect of the change, as it directly impacts the financial statements being audited.

When the Auditor Evaluates the Effect of a Change in Accounting