CPA firms can establish policy guidelines to help their auditors determine materiality.

Question

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CPA firms can establish their own policy guidelines on materiality to provide guidance to their auditors. These guidelines can help the auditors determine the level of misstatement that would be considered material for the financial statements. This can ensure consistency in the application of materiality across different audits and auditors within the firm.

CPA Firms Can Establish Policy Guidelines to Help Their Auditors