Which of the Following Statements Is Correct Regarding the Auditor's

question 74

Multiple Choice

Which of the following statements is correct regarding the auditor's determination of materiality for a public company audit?

• A)The planning level of materiality should normally be the larger of the amount considered for the balance sheet versus the income statement.
• B)The auditors' planning level of materiality may be disaggregated into smaller "tolerable misstatements" for the various accounts.
• C)Auditors may use various rules of thumb to arrive at an evaluation level of materiality,but not for determining the planning level of materiality.
• D)The amount used for the planning should equal that used for evaluation.

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