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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Definitions:

Ocular Lens

The lens inside the eye that focuses light on the retina to create clear images.

Oil-immersion

A technique used in light microscopy where an oil with a high refractive index is placed between the specimen slide and objective lens to increase resolution.

Low-power

Typically refers to a setting or condition involving low-level energy or magnification.

High-power

Refers to an objective lens on a microscope with a high magnification capability, used for examining small or detailed samples.