Most practitioners allocate the preliminary judgment about materiality to balance sheet accounts.

Question

Quizplus · Accepted Answer

This statement is true. Materiality is often judged in relation to balance sheet accounts because they represent the financial position of an entity at a particular point in time, and therefore their accuracy and completeness are crucial for making informed decisions about the entity's financial health. However, materiality can also be applied to income statement accounts, disclosures, and other financial information.

Most Practitioners Allocate the Preliminary Judgment About Materiality to Balance