The materiality threshold for each account balance or class of transactions is called
A) tolerable misstatement
B) material assertion
C) substantive rule of thumb
D) account deficiency

Question

Quizplus · Accepted Answer

The materiality threshold for each account balance or class of transactions is known as tolerable misstatement, which is a benchmark used by auditors to assess the effectiveness and reliability of the client's internal controls and financial reporting. It is used to determine whether a misstatement or error in financial statements is material or not.

The Materiality Threshold for Each Account Balance or Class of Transactions