CAS 320 (materiality in planning and performing an audit)defines materiality in terms of three key concepts.The first and second concepts are that a material misstatement should be considered in the context of knowledgeable users and the effect on decision making;and that material is relative to circumstances surrounding the decision and nature of the information.The third concept is
A)that the auditor should consider users of financial statements as a group.
B)that the auditor should consider users of financial statements individually.
C)that the users should be informed and approve of the materiality used by the auditor.
D)that the auditor should be conservative in setting the materiality level.

Question

Quizplus · Accepted Answer

The third concept of materiality as defined in CAS 320 emphasizes considering the users of financial statements as a group rather than individually, to ensure that the audit is conducted with a perspective that is relevant to the general needs of the users.

CAS 320 (Materiality in Planning and Performing an Audit)defines Materiality