Which of the following statements is usually True?
A)Materiality is easy to quantify.
B)Fraudulent financial statements are often easy for the auditor to detect,especially when there is collusion among management.
C)Reasonable assurance is a low level of assurance that the financial statements are free from material misstatement.
D)An item is considered material if it would likely have changed or influenced the decisions of a reasonable person using the statements.

Question

Quizplus · Accepted Answer

The definition of materiality is that an item is considered material if it would likely have changed or influenced the decisions of a reasonable person using the statements. Materiality is not easy to quantify, as it depends on various factors including the size of the organization, the industry it operates in, and the nature of the transactions being considered. Fraudulent financial statements can be difficult to detect, especially if there is collusion among management. Reasonable assurance is a high level of assurance that the financial statements are free from material misstatement.

Which of the Following Statements Is Usually True