In considering materiality for planning purposes, an auditor believes that misstatements aggregating $10 000 would have a material effect on an entity's income statement, but that misstatements would have to aggregate $20 000 to materially affect the statement of financial position. Ordinarily, it would be appropriate to design auditing procedures that would be expected to detect misstatements that aggregate:
A) $10 000.
B) $15 000.
C) $20 000.
D) $30 000.

Question

Quizplus · Accepted Answer

The auditor should design auditing procedures to detect misstatements that would materially affect the income statement, which is the lower threshold of $10,000 in this case.

In Considering Materiality for Planning Purposes, an Auditor Believes That