Which of the following would not be an appropriate benchmark to use in setting financial statement-level materiality?
A) a percentage of total revenue
B) a percentage of total assets
C) a percentage of current liabilities
D) a percentage of profit from continuing operations

Question

Quizplus · Accepted Answer

Materiality should be based on factors that are relevant to the financial statement users. Current liabilities do not reflect a company's overall financial performance and, therefore, may not be an appropriate benchmark to use in setting financial statement-level materiality. A, B, and D are commonly used benchmarks in determining materiality.

Which of the Following Would Not Be an Appropriate Benchmark