The auditors must consider materiality in planning an audit engagement.Materiality for planning purposes is:
A)The auditors' preliminary estimate of the largest amount of misstatement that would be material to any one of the client's financial statements.
B)The auditors' preliminary estimate of the smallest amount of misstatement that would be material to any one of the client's financial statements.
C)The auditors' preliminary estimate of the amount of misstatement that would be material to the client's balance sheet.
D)An amount that cannot be quantitatively stated since it depends on the nature of the item.

Question

Quizplus · Accepted Answer

Materiality for planning purposes involves the auditors' preliminary estimate of the smallest amount of misstatement that would be considered material to any one of the client's financial statements. This concept helps auditors determine the nature, timing, and extent of audit procedures.

The Auditors Must Consider Materiality in Planning an Audit Engagement