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:

Savings

Money set aside for future use that is not currently spent on consumption or expenses.

Correlation Coefficient

A metric that determines the intensity and orientation of a linear connection between two variables.

T Test

A statistical test used to determine if there is a significant difference between the means of two groups which may be related in certain features.