If an auditor establishes a relatively high level for materiality, then the auditor will
A) accumulate more evidence than if a lower level had been set.
B) accumulate less evidence than if a lower level had been set.
C) accumulate approximately the same evidence as would be the case were materiality lower.
D) accumulate an undetermined amount of evidence.

Question

Quizplus · Accepted Answer

If an auditor establishes a relatively high level for materiality, it means that the auditor believes that misstatements smaller than that level will not affect the decision-making process of financial statement users. Therefore, the auditor will accumulate less evidence than if a lower level had been set to detect misstatements smaller than the higher materiality level.

If an Auditor Establishes a Relatively High Level for Materiality