Audit standards require the auditor to consider materiality early in the audit.Which statement(s)regarding preliminary materiality are true?
I.Preliminary materiality may change during the engagement.
II.Preliminary materiality is the maximum amount by which the auditor believes the financials could be misstated and still not affect the decisions of reasonable users.
A)I only
B)II only
C)both I and II
D)neither are true

Question

Quizplus · Accepted Answer

Both statements I and II regarding preliminary materiality are true. Preliminary materiality is the initial level of materiality determined by the auditor, which may change during the course of the audit as the auditor obtains more information. It represents the maximum amount by which the auditor believes the financial statements could be materially misstated and still not affect the decisions of reasonable users. Therefore, both statements are correct.

Audit Standards Require the Auditor to Consider Materiality Early in the Audit.Which