Which of the following statements about materiality is incorrect?
A) The preliminary assessment of materiality guides audit planning and testing.
B) Materiality is used to guide the validity of information contained in the financial statements.
C) Materiality is a key auditing concept that is assessed during the planning stage of every audit.
D) Information is considered material if it has no impact on the decision-making process of financial statement users.

Question

Quizplus · Accepted Answer

The statement that information is considered material if it has no impact on the decision-making process of financial statement users is incorrect. Materiality refers to the significance or importance of information in the financial statements and its impact on the decision-making process of the users. The higher the materiality level, the more likely it is that the information will affect the decisions of the users.

Which of the Following Statements About Materiality Is Incorrect