During the course of an audit,misstatements that are individually immaterial may be detected.What should the auditor do with these?
A)Permanently pass on these immaterial misstatements as they do not individually impact the financial statements.
B)Request that management footnote the immaterial misstatements in the financial statements for fair presentation.
C)Accumulate all of the known and projected misstatements to determine if the impact is material in the aggregate.
D)Roll them forward for three years when they will become material enough to adjust.

Question

Quizplus · Accepted Answer

The auditor should accumulate all of the known and projected misstatements to determine if the impact is material in the aggregate. Even though the misstatements may not be material individually, they could still have a material impact when aggregated. The auditor should consider the quantitative and qualitative factors of the misstatements to determine if they need to be adjusted or disclosed. The other options are not appropriate or in line with generally accepted auditing standards.

During the Course of an Audit,misstatements That Are Individually Immaterial