Materiality decisions are based on:
A) qualitative factors.
B) quantitative factors.
C) the audit fees.
D) Both a and b

Question

Quizplus · Accepted Answer

Materiality decisions are based on both qualitative and quantitative factors. Qualitative factors relate to the nature of the transaction or event and its perceived impact on users of the financial statements, while quantitative factors involve numerical thresholds and percentages applied to the financial statements. The audit fees may be considered as a factor in determining materiality but are not the primary basis for materiality decisions.

Materiality Decisions Are Based On