In Which of the Following Cases Is It Not Necessary

question 55

Multiple Choice

In which of the following cases is it not necessary for an auditor to revise the original materiality level and document the new materiality amount, as well as the rationale for changing the amount?

• A) If there is a change in circumstances that involve laws, regulations, or the accounting framework.
• B) If there is new information resulting from the risk assessment of the client.
• C) If there are changes in the understanding of the client about a new contractual agreement.
• D) If the client plans to change depreciation methods for new plant assets procured in the future.

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Definitions:

Order Costs

Expenses associated with making and processing an order for goods or services.

Economic Order Quantity

The optimal quantity of stock that minimizes the total costs associated with ordering and holding inventory.

Carrying Costs

Carrying costs are expenses associated with holding inventory, including storage, insurance, and opportunity costs, among others.