Which of the following is not correct about materiality?
A)The concept of materiality recognizes that some matters are more important for fair presentation of financial statements
B)Materiality judgments are made in light of surrounding circumstances and necessarily involve quantitative and qualitative judgments
C)Materiality should be predictable from audit to audit so that the readers of financial statements know what constitutes materiality
D)An auditor's consideration of materiality is influenced by the auditor's perception of the need of the readers of the financial statements

Question

Quizplus · Accepted Answer

Materiality is a relative concept and is dependent on the context and circumstances of each audit engagement. It cannot be predetermined and should not be consistently applied from one engagement to another. Therefore, option C is incorrect. Materiality judgments should be based on professional judgment and should take into account both quantitative and qualitative factors in a particular audit engagement. Options A, B, and D are correct statements about materiality.

Which of the Following Is Not Correct About Materiality