alleryStart learning →Why did the IASB decline a uniform numeric materiality threshold?
AMateriality is entity specific
BMateriality has no user value
CAuditors prefer fixed rules
DThe law forbids thresholds
Answer & Solution
Correct answer: A. Materiality is entity specific
Materiality depends on the size, magnitude or both of items for a particular entity, so one threshold cannot fit all.
Keep practising Risk Assessment and Internal Control
Browse all Risk Assessment and Internal Control questions for CA Final, or explore more Auditing topics.
Related questions
Which is correct about auditors and internal control?The COSO risk assessment component involves what?A payables system matches order, receipt and invoice before paying. Which objective?Maintaining documentation to substantiate transactions is which control activity?Materiality is reassessed at the conclusion of the audit before the report is issued. WhatWhat is the purpose of setting performance materiality?Which expression gives audit risk in the audit risk model?Control risk is assessed higher in an entity where what is true?