The dollar amount of some misstatements cannot be accurately measured.If,for example,the client was unwilling to disclose an existing lawsuit,the materiality question the auditor must evaluate in such a situation is
A)what effect will it have on net income?
B)how will it affect management's future decisions?
C)will it increase the auditor's exposure to lawsuits?
D)what effect will it have on financial statement users?

Question

Quizplus · Accepted Answer

In the situation where the dollar amount of misstatements cannot be accurately measured, the auditor must consider any potential impact on financial statement users. This is because the overall goal of auditing is to provide assurance on the accuracy and reliability of the financial statements for the benefit of users. The impact on net income or management's decisions may not be as relevant if the misstatement is related to a disclosure or omission that could affect the judgment of financial statement users. Therefore, choice D is the best option.

The Dollar Amount of Some Misstatements Cannot Be Accurately Measured