The Concept of Materiality Would Be least important to an Auditor

question 16

Multiple Choice

The concept of materiality would be least important to an auditor when considering the:

• A)Total value of the account being audited.
• B)Adequacy of disclosure of a client's illegal act.
• C)Discovery of weaknesses in a client's internal control.
• D)Effects of a direct financial interest in the client upon the CPA's independence.

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Definitions:

Taxable Income

The amount of income that is used to calculate how much tax an individual or a company owes to the government.

Married Filing Jointly

A tax filing status for married couples that allows them to combine their tax obligations into a single return.

Tax Equation

A mathematical formula used to calculate the amount of taxes owed based on income, deductions, and applicable tax rates.

Net Pay

The amount of money a worker takes home after all deductions, such as taxes and retirement contributions, have been subtracted from the gross salary.