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Tarif FlorenceACCT 590External Auditing3/23/20169-22 (Objectives 9-1, 9-2)The following questions deal with materiality.Choose the best response.a.Which one of the following statements is correct concerning the concept of materiality?(1)Materiality is determined by reference to guidelines established by the AICPA.(2)Materiality depends only on the dollar amount of an item relativeto other items in the financial statements.(3)Materiality depends on the nature of an item rather than the dollar amount.(4)Materiality is a matter of professional judgment.b. Which of the following is notcorrect about materiality?c.In considering materiality for planning purposes, an auditor believes that misstatements aggregating $10,000 will have a material effect on an entity’s income statement, but that misstatements will haveto aggregate $20,000 to materially affect the balance sheet. Ordinarily, it is appropriate to design audit procedures that are expected to detect misstatements that aggregate