When setting the level of materiality on a particular engagement, the auditor is required to consider:
A) the unique circumstances pertaining to the entity.
B) the information needs of the users.
C) neither the unique circumstances pertaining to the entity nor the information needs of the users.
D) the information needs of the client.
E) both the unique circumstances pertaining to the entity and the information needs of the users.

Question

Quizplus · Accepted Answer

Materiality in an audit context is influenced by both the unique circumstances of the entity being audited and the information needs of the users of the financial statements. The auditor must consider what is material to users in the context of the specific entity's situation.

When Setting the Level of Materiality on a Particular Engagement