An aim of allocating a preliminary judgement about materiality to balance sheet accounts is to:
A) minimise audit costs and maintain audit quality.
B) determine the level of audit to accumulate.
C) increase audit quality.
D) reduce audit risk.

Question

Quizplus · Accepted Answer

Allocating a preliminary judgement about materiality helps to identify accounts that may need closer attention during the audit, which can help minimise audit costs while maintaining audit quality. Decisions about materiality can also help auditors determine the level of audit evidence needed to support their opinion, but the primary goal is to ensure that the audit is efficient and effective in detecting material misstatements.

An Aim of Allocating a Preliminary Judgement About Materiality to Balance