Which of the following would an auditor most likely use in determining the auditor's preliminary judgment about materiality?

Question

Quizplus · Accepted Answer

Choice "C" is correct. The auditor would most likely use the entity's financial statements of the prior year in the preliminary determination of materiality. The prior year financial statements would be a good starting point in estimating the current year's expected results, especially for a continuing client. Choice "A" is incorrect. The assessment of control risk affects the design of audit procedures but is not relevant in determining materiality. Choice "B" is incorrect. The anticipated sample size for planned substantive tests is set after the preliminary materiality level is determined. Choice "D" is incorrect. Management assertions embodied in the financial statements have little relationship to materiality.

Which of the Following Would an Auditor Most Likely Use