Which of the following statements about the materiality concept is not true?
A)Materiality is different for each company.
B)A material error would change the opinion of the average prudent investor.
C)Any error greater than $5,000 is considered material in a financial statement audit.
D)Material misstatements should not exist in order for a company to receive an unqualified audit opinion.

Question

Quizplus · Accepted Answer

The concept of materiality is very subjective.An error,or other reporting problem,is material if knowing about it would influence the decisions of an average prudent investor.Thus,materiality is different for each company and $5,000 is not necessarily a threshold for materiality.

Which of the Following Statements About the Materiality Concept Is