Which of the Following Is Not Correct About Materiality

question 20

Multiple Choice

Which of the following is not correct about materiality?

• A) The concept of materiality recognizes that some matters are more important for fair presentation of financial statements
• B) Materiality judgments are made in light of surrounding circumstances and necessarily involve quantitative and qualitative judgments
• C) Materiality should be predictable from audit to audit so that the readers of financial statements know what constitutes materiality
• D) An auditor's consideration of materiality is influenced by the auditor's perception of the needs of the readers of the financial statements

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Definitions:

Degree of Excellence

A measure of how well a product, service, or process meets predetermined standards of quality and customer expectation.

Variability Control

A practice in quality management aiming to reduce or eliminate variation in processes or products to ensure consistency and reliability.

Service Quality

The degree to which a delivered service meets and fulfills the customer's expectations and requirements.

Determinants

Factors that decisively affect the nature or outcome of something.