All else being equal, as the level of materiality decreases, the amount of evidence required will:
A) increase.
B) decrease.
C) remain the same.
D) change in an unpredictable fashion.

Question

Quizplus · Accepted Answer

When the level of materiality decreases, auditors consider smaller items to potentially be material, which requires them to gather more evidence to ensure the financial statements are free of material misstatement. This is because they are looking more closely at smaller transactions or balances, necessitating a higher volume of evidence to confirm their accuracy.

All Else Being Equal, as the Level of Materiality Decreases