The purpose of allocating planning materiality to balance sheet accounts is to
A)assess the appropriate evidence to accumulate for each account on the balance sheet.
B)assess the appropriate evidence to accumulate for each account on both the balance sheet and income statement.
C)reduce the amount of procedures done in the course of the audit.
D)increase the possibility that fraud or illegal activities would be detected by audit procedures.

Question

Quizplus · Accepted Answer

Allocating planning materiality to balance sheet accounts helps auditors determine the extent of evidence needed for both balance sheet and income statement accounts, as misstatements in balance sheet accounts can affect the income statement.

The Purpose of Allocating Planning Materiality to Balance Sheet Accounts