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

Materiality is a subjective concept, and it is not always easy to quantify. Fraudulent financial statements can be difficult for auditors to detect, even with collusion among management. Reasonable assurance is a high level of assurance that there are no material misstatements. An item is considered material if it could likely impact the decisions of a reasonable person using the statements.

Which of the Following Statements Is Usually True