Planning materiality helps the auditor determine the extent of audit evidence needed.

Question

Quizplus · Accepted Answer

Planning materiality is a key factor in determining the scope of the audit and the extent of audit evidence needed. It is used to set a threshold for determining whether financial statement amounts or disclosures are material and whether they require further scrutiny and testing by the auditor. Therefore, planning materiality is an important tool in helping the auditor determine the appropriate level of audit evidence required to support their opinion on the financial statements.

Planning Materiality Helps the Auditor Determine the Extent of Audit