Why do auditors establish a preliminary judgment about materiality?
A) to determine the appropriate level of staff to assign to the audit
B) so the client can know what records to make available to the auditor
C) to help plan the appropriate evidence to accumulate
D) to finalize the control risk assessment

Question

Quizplus · Accepted Answer

Auditors establish a preliminary judgment about materiality to help plan the appropriate evidence to accumulate. This allows for the auditor to determine the extent of tests that must be performed and whether or not misstatements are material enough to affect the overall financial statements. It is not related to assigning appropriate staff, making records available, or finalizing control risk assessment.

Why Do Auditors Establish a Preliminary Judgment About Materiality