In planning the audit, the auditor should assess materiality at two levels:
A) the preliminary level and the final level.
B) the company level and the divisional level.
C) the account balance level and the detailed item level.
D) the financial statement level and the account balance level.
E) the account balance level and the transaction level.

Question

Quizplus · Accepted Answer

Materiality is assessed at two levels during audit planning: the financial statement level, which concerns the financial statements as a whole, and the account balance level, which focuses on specific accounts within the financial statements. This approach helps auditors determine the nature, timing, and extent of audit procedures.

In Planning the Audit, the Auditor Should Assess Materiality at Two