When considering materiality for planning purposes, an auditor believes that misstatements aggregating $10 000 would have a material effect on an entity's income statement, but that misstatements would have to aggregate $20 000 to materially affect the statement of financial position.Ordinarily, it would be appropriate to design auditing procedures that would be expected to detect misstatements that aggregate:
A)$10 000.
B)$15 000.
C)$20 000.
D)$30 000.

Question

Quizplus · Accepted Answer

The auditor should design procedures to detect the lower amount of misstatement ($10,000) that they believe would have a material effect on the financial statements, in this case, the income statement. This ensures that all potentially material misstatements are identified.

When Considering Materiality for Planning Purposes, an Auditor Believes That