Which of the following statements regarding materiality is correct?
A) Materiality is a key auditing concept.
B) The preliminary assessment of materiality guides audit planning.
C) Items are material if they impact on the decision making of the users of the financial statements.
D) all of the above

Question

Quizplus · Accepted Answer

All of the statements are correct. Materiality is a crucial concept in auditing as it guides the auditor in determining the significance of potential misstatements in the financial statements. The preliminary assessment of materiality informs the auditor's planning process, including the nature and extent of audit procedures that need to be performed. Items are considered material if they have a potential impact on the users' decision-making process or if they could influence their perception of the financial statements.

Which of the Following Statements Regarding Materiality Is Correct