Audit standards require the auditor to consider materiality early in the audit.Which statement(s)regarding preliminary materiality are True?
I. Preliminary materiality may change during the engagement.
II. Preliminary materiality is the maximum amount by which the auditor believes the financials could be misstated and still not affect the decisions of reasonable users.
A)I only
B)II only
C)both I and II
D)neither I nor II

Question

Quizplus · Accepted Answer

I is true as the auditor may revise preliminary materiality during the course of the audit based on the audit findings. II is also true as preliminary materiality is the threshold above which misstatements could influence users' decisions. Therefore, both statements are true.

Audit Standards Require the Auditor to Consider Materiality Early in the Audit.Which