Which of the Following Statements Is Not True About Materiality

question 41

Multiple Choice

Which of the following statements is not true about materiality judgments?

• A) The auditor's consideration of materiality is influenced by the auditor's perception of the needs of users of financial statements.
• B) The auditor considers materiality only in relation to classes of transactions, account balances, and disclosures.
• C) Materiality judgments are used to help the auditor gather sufficient appropriate evidence about whether the financial statements are free of material misstatement.
• D) Materiality decisions differ from one audit client to another.

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Definitions:

Profit-Sharing Plan

A company program that gives employees a share in the profits based on its quarterly or annual earnings.

Employee Morale

The overall outlook, satisfaction, and confidence that employees feel towards their workplace.

Incentive Plan

A program designed to motivate and reward employees for meeting or exceeding performance and productivity targets.

Company's Success

A company's success is measured by its ability to achieve its goals, financial prosperity, and the satisfaction of its stakeholders.