The concept of materiality is pervasive to the audit process and guides the nature and extent of audit testing.

Question

Quizplus · Accepted Answer

Materiality is a key concept in auditing and refers to the threshold or level of significance beyond which potential misstatements in the financial statements would impact the decision-making of users. Materiality therefore guides the extent and nature of audit testing, with a focus on areas that are considered material to the financial statements.

The Concept of Materiality Is Pervasive to the Audit Process