The purpose of making materiality judgments is to make sure that financial statements are free of any material misstatement.

Question

Quizplus · Accepted Answer

Materiality judgments are important to ensure that financial statements do not have any significant misstatements that could impact the interpretation and decision-making of users of those statements. Materiality is determined by considering the size and nature of the item, as well as its relevance to the financial statements as a whole. This helps to ensure that the financial statements provide a true and fair view of the entity's financial position, performance, and cash flows.

The Purpose of Making Materiality Judgments Is to Make Sure