CAS 320 (Materiality in Planning and Performing an Audit)defines Materiality

question 66

Multiple Choice

CAS 320 (materiality in planning and performing an audit) defines materiality in terms of three key concepts.The first and second concepts are that a material misstatement should be considered in the context of knowledgeable users and the effect on decision making;and that material is relative to circumstances surrounding the decision and nature of the information.The third concept is

• A)that the auditor should consider users of financial statements as a group.
• B)that the auditor should consider users of financial statements individually.
• C)that the users should be informed and approve of the materiality used by the auditor.
• D)that the auditor should be conservative in setting the materiality level.

---

Definitions:

Atomic Sentences

Simplest statements in logic that express a complete thought or claim without any logical connectives, capable of being true or false.

Truth Values

The attribute of a statement that denotes its correspondence with fact or reality, usually as true or false.

Truth Table

A table used in logic to determine the truth values of logical expressions based on all the possible combinations of their constituents.

Atomic Sentences

Statements in logic that cannot be broken down into simpler components and assert a single fact.