Once the auditor calculates materiality,he uses the concept of materiality
A)to determine the timing of substantive tests
B)to determine the amount below which misstatements will always be evaluated as immaterial
C)to evaluate the effect of uncorrected misstatements on the financial statements
D)to determine if there are any deficiencies in internal control

Question

Quizplus · Accepted Answer

Once the auditor calculates materiality, the concept of materiality is primarily used to evaluate the effect of uncorrected misstatements on the financial statements. This involves determining if the misstatement is material enough to affect the decisions of the financial statement users. The auditor will then need to assess the implications of the misstatement and decide whether it warrants a modification of the auditor's opinion or disclosure in the financial statements. While materiality can also be considered when determining the timing of substantive tests, the amount below which misstatements will always be evaluated as immaterial, and to identify deficiencies in internal control, these uses are not the primary purpose of materiality in the audit process.

Once the Auditor Calculates Materiality,he Uses the Concept of Materiality