Planning materiality is typically less than overall materiality and helps the auditor to determine the extent of:
A)audit evidence needed.
B)analytical procedure performed.
C)substantive procedure performed.
D)work performed.

Question

Quizplus · Accepted Answer

Planning materiality is a preliminary estimate of the maximum amount of misstatement in the financial statement that is acceptable to the auditor, and it is typically less than overall materiality. The purpose of planning materiality is to help the auditor determine the extent of audit evidence needed to support their audit opinion. Therefore, choice A is the best answer as it correctly identifies the extent of audit evidence needed. Choices B, C, and D are incorrect as they do not accurately describe the purpose of planning materiality.

Planning Materiality Is Typically Less Than Overall Materiality and Helps