The assessment of materiality has a pervasive impact on the audit.

Question

Quizplus · Accepted Answer

The assessment of materiality is a fundamental concept in auditing, and it affects many aspects of the audit, including the planning, performance, and reporting of the audit. Materiality is the threshold used to determine whether an error, omission, or misstatement in the financial statements is significant enough to affect the decisions of users of the financial statements. The auditor must use professional judgment to assess materiality and to determine the nature, timing, and extent of audit procedures to be performed. Thus, the assessment of materiality has a pervasive impact on the audit.

The Assessment of Materiality Has a Pervasive Impact on the Audit