Which of the Following Statements Is Not Correct About Materiality

question 511

Multiple Choice

Which of the following statements is not correct about materiality?

• A) The concept of materiality recognizes that some matters are important for fair presentation of financial statements in conformity with GAAP, while other matters are not important.
• B) An auditor considers materiality for planning purposes in terms of the largest aggregate level of misstatements that could be material to any one of the financial statements.
• C) Materiality judgments are made in light of surrounding circumstances and necessarily involve both quantitative and qualitative judgments.
• D) An auditor's consideration of materiality is influenced by the auditor's perception of the needs of a reasonable person who will rely on the financial statements.

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Definitions:

Cones

Photoreceptor cells in the retina of the eye that function best in relatively bright light and provide the ability to perceive color and fine detail.

Wavelengths

The distance between successive crests of a wave, typically used in the context of electromagnetic waves, sound waves, or other wave phenomena.

Visual Receptors

Cells located in the retina of the eye that are sensitive to light and enable vision.

Color Vision

The ability of the visual system to distinguish objects based on the wavelengths of the light they reflect, emit, or transmit.