In the audit of ABC Company,where materiality was assessed as $15,000,three misstatements were detected: an improper asset capitalization of $18,000,an employee theft of $5,000 and a $5 posting error.In accordance with CAS 260,the auditor must report which of these misstatements to the audit committee?
A)Only the $18,000 misstatement.
B)Both the $18,000 and $5,000 misstatement,but not the $5 error.
C)All three misstatements must be reported.
D)None of the misstatements need be reported to the audit committee,just to an appropriate level of management.

Question

Quizplus · Accepted Answer

The $18,000 and $5,000 misstatements are both material because they exceed the materiality threshold of $15,000. The $5 posting error is not material and does not need to be reported to the audit committee.

In the Audit of ABC Company,where Materiality Was Assessed as $15,000,three