Performance materiality is important for verifying current year additions because these transactions have consistent dollar amounts from year to year.

Question

Quizplus · Accepted Answer

Performance materiality is not solely based on consistent dollar amounts from year to year. It takes into account various factors such as the size and complexity of the entity, the risk of material misstatements, and the materiality of individual transactions or account balances. Therefore, relying solely on consistent dollar amounts may not be sufficient for verifying current year additions.

Performance Materiality Is Important for Verifying Current Year Additions Because