Materiality at the Account Balance Level Is Stated in Planning

question 47

Multiple Choice

Materiality at the account balance level is stated in planning an audit because:

• A) some users make decisions based upon individual account balances.
• B) the auditor verifies account balances in reaching an overall conclusion on the fairness of the financial statements.
• C) the opinion on the fairness of the financial statements extends to the individual account balances.
• D) official pronouncements have specified different levels of materiality for various financial statement items.
• E) the opinion on the fairness of the financial statements extends to the individual transactions.

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Definitions:

Utilitarian Outcomes

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Rosabeth Moss Kanter is a professor at Harvard Business School, known for her research in strategy, innovation, and leadership for change.

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