During the audit of XYZ Ltd the auditor found a misstatement that equated to 7% of the base amount. According to the guidelines provided by AASB 1031.this amount is deemed to be:
A) material.
B) not material.
C) a matter of professional judgement whether it is considered material.
D) none of the above.

Question

Quizplus · Accepted Answer

AASB 1031 does not specify a precise threshold for materiality; rather, it suggests that materiality is a matter of professional judgement. The determination of whether a misstatement of 7% is material depends on the context of the financial information and the judgement of the auditor.

During the Audit of XYZ Ltd the Auditor Found a Misstatement