By setting a higher planning materiality level,an auditor increases the quality and quantity of evidence that needs to be obtained.

Question

Quizplus · Accepted Answer

By setting a higher planning materiality level, an auditor reduces the quality and quantity of evidence that needs to be obtained as the auditor is willing to accept a higher level of misstatement. This is because materiality level determines the threshold for finding errors or fraud in a financial statement. Once that threshold is crossed, the audit opinion could be affected. So, by increasing the planning materiality level, the auditor is willing to accept a higher level of misstatement, and thus requires less evidence to conclude on the financial statement.

By Setting a Higher Planning Materiality Level,an Auditor Increases the Quality