Which of the following statements is not correct about materiality?
A)The concept of materiality recognizes that some matters are important for fair presentation of financial statements in conformity with GAAP, while other matters are not important.
B)An auditor considers materiality for the aggregate level of misstatements that could be material to any one of the financial statements individually.
C)Materiality judgments are made in light of surrounding circumstances and necessarily involve both quantitative and qualitative judgments.
D)An auditor's consideration of materiality is influenced by the auditor's perception of the needs of a reasonable person who will rely on the financial statements.

Question

Which of the following statements is not correct about materiality? 
A)The concept of materiality recognizes that some matters are important for fair presentation of financial statements in conformity with GAAP, while other matters are not important.
B)An auditor considers materiality for the aggregate level of misstatements that could be material to any one of the financial statements individually.
C)Materiality judgments are made in light of surrounding circumstances and necessarily involve both quantitative and qualitative judgments.
D)An auditor's consideration of materiality is influenced by the auditor's perception of the needs of a reasonable person who will rely on the financial statements.

Quizplus · Accepted Answer

An auditor considers materiality for the aggregate level of misstatements that could be material to the financial statements taken as a whole, rather than individually for each financial statement. However, the overall financial statements will also contain individual financial statements such as an income statement or balance sheet. Therefore, this statement is not correct.

Which of the Following Statements Is Not Correct About Materiality