Which of the Following Is Not True About Materiality Judgment

question 38

Multiple Choice

Which of the following is not true about materiality judgment?

• A)The auditor's consideration of materiality is influenced by the auditor's perception of the needs of users of financial statements.
• B)The auditor considers materiality only in relation to classes of transactions,account balances,and disclosures.
• C)Materiality judgments make sure that the auditor gathers sufficient evidential matter to obtain reasonable assurance about whether the financial statements are free of material misstatement.
• D)Materiality decisions differ from one audit client to another.

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Definitions:

Financial Crisis

A situation characterized by a significant decline in the value of financial institutions or assets, leading to a loss of confidence and potentially economic downturns.

Fair Value Accounting

A method of accounting that measures and reports certain assets and liabilities at their estimated market values at the time of the financial statement.

Mark-to-Market

An accounting method that values assets and liabilities based on current market prices.

Real Actions

Legal procedures taken to determine the title to property, as opposed to personal claims against a person.