If an auditor were to use 5% of income before taxes as a basis for materiality,it would be an example of judgment based on ________.
A)absolute size
B)relative size
C)nature of the item
D)cumulative effects

Question

Quizplus · Accepted Answer

Using 5% of income before taxes as a basis for materiality is an example of relative size since it is based on a percentage of the financial statement amounts.

If an Auditor Were to Use 5% of Income Before