Which of the Following Statements Is Not Correct About Materiality

question 51

Multiple Choice

Which of the following statements is not correct about materiality? 

• A)The concept of materiality recognizes that some matters are important for fair presentation of financial statements in conformity with GAAP, while other matters are not important.
• B)An auditor considers materiality for the aggregate level of misstatements that could be material to any one of the financial statements individually.
• C)Materiality judgments are made in light of surrounding circumstances and necessarily involve both quantitative and qualitative judgments.
• D)An auditor's consideration of materiality is influenced by the auditor's perception of the needs of a reasonable person who will rely on the financial statements.

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Definitions:

Sensory Adaptation

The procedure through which sense organs gradually become less responsive to persistent stimuli, permitting living beings to focus on variations within their environment.

Touch

The act or sense of coming into physical contact with something else, providing sensory feedback and emotional communication.

Frequency Theory

A theory suggesting that the perception of pitch corresponds to the rate, or frequency, at which the entire basilar membrane vibrates.

Temporal Theory

A hypothesis in the study of perception, often relating to how sounds are perceived in terms of timing.