Auditors cannot use prior year financial statement balances to establish their preliminary judgment about materiality in planning the current year's audit.

Question

Quizplus · Accepted Answer

Auditors often use prior year financial statement balances as a starting point to establish their preliminary judgment about materiality in planning the current year's audit, adjusting for any known changes in the business or its environment.

Auditors Cannot Use Prior Year Financial Statement Balances to Establish