In allocating financial statement materiality to the various accounts, the auditor should consider:
A) the likelihood of misstatements in the account.
B) the probable cost of verifying the account.
C) neither the likelihood of misstatements in the account nor the probable cost of verifying the account.
D) both the likelihood of misstatements in the account and the probable cost of verifying the account.
E) the likelihood of misstatements in a transaction.

Question

Quizplus · Accepted Answer

The auditor should consider both the likelihood of misstatements in the account and the probable cost of verifying the account when allocating financial statement materiality to the various accounts.

In Allocating Financial Statement Materiality to the Various Accounts, the Auditor