Last year the materiality for the client was $590 000.This year it is $400 000.All things being equal,how will this change in materiality affect the extent of tests of details?
A)increase
B)decrease
C)no effect as the tests of controls will be increased
D)no effect as the tests of controls will be decreased

Question

Quizplus · Accepted Answer

When materiality decreases, auditors typically increase the extent of tests of details to detect smaller misstatements that are now considered material.

Last Year the Materiality for the Client Was $590 000