Which of the following is the most important qualitative factor that auditors should consider when making materiality judgments?
A)A misstatement exceeded five percent of net income.
B)The auditor also provides consulting services to the audit client.
C)The misstatement will cause the client to fail to meet an earnings forecast.
D)The audit committee is not well-educated about the accounting principle in question.

Question

Quizplus · Accepted Answer

The most important qualitative factor is whether the misstatement will cause the client to fail to meet an earnings forecast, as this directly impacts stakeholders' decisions and perceptions, making it a critical consideration for auditors in assessing materiality.

Which of the Following Is the Most Important Qualitative Factor