Question

QUESTION Define the meaning of the term “materiality” as it is used in accounting and auditing....

QUESTION

Define the meaning of the term “materiality” as it is used in accounting and auditing.

What is the relationship between materiality and the phrase “reasonable assurance” used in the auditor’s report?

Homework Answers

Answer #1

Answer :-

Materiality is characterized as:

the size of an exclusion or error of bookkeeping data that, in light of the encompassing conditions, makes it plausible that the judgment of a sensible individual depending on the data would have been changed or affected by the oversight or misquote.

Relationship between materiality and the phrase “reasonable assurance” used in the auditor’s report :-

  • "Acquire sensible confirmation," as utilized in the review report, implies that the reviewer does not ensure or guarantee the reasonable introduction of the monetary proclamations.
  • There is some hazard that the monetary explanations contain a material error.
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1.Which of the following is not a type of materiality? Auditor’s materiality Performance materiality Overall materiality...
1.Which of the following is not a type of materiality? Auditor’s materiality Performance materiality Overall materiality SUM 2.T/F. The planned audit evidence is subject to change based on the results of the audit risk model 3.T/F. An auditor with a long term relationship with a client than a short term relationship may suffer harm, even though the audit report rendered for the client is correct. 4.T/F. When auditing inventory, sheet to floor is an example of tracing and floor to...
Explain the meaning of the term “accounting principles” as used in the audit report. (Do not...
Explain the meaning of the term “accounting principles” as used in the audit report. (Do not discuss in this part the significance of “generally accepted.”)
Q1 Generally accepted auditing standards are A Required procedures to be used to gather evidence to...
Q1 Generally accepted auditing standards are A Required procedures to be used to gather evidence to support financial statements. B Policies and procedures designed to provide reasonable assurance that the CPA firm and its personnel comply with professional standards. C Pronouncements issued by the Auditing Standards Board. D    Rules acknowledged by the accounting profession because of their universal application. Q2 An attestation engagement is one in which a CPA is engaged to A Testify as an expert witness in accounting,...
The following questions deal with auditing standards. Choose the best response. a. Which of the following...
The following questions deal with auditing standards. Choose the best response. a. Which of the following best describes what is meant by U.S. auditing standards? (1) Acts to be performed by the auditor (2) Measures of the quality of the auditor’s performance (3) Procedures to be used to gather evidence to support financial statements (4) Audit objectives generally determined on audit engagements b. The Responsibilities principle underlying AICPA auditing standards includes a requirement that (1) the audit be adequately planned...
Subject: Accounting information system/ERP Question: Define ERP and its relationship to an accounting software package such...
Subject: Accounting information system/ERP Question: Define ERP and its relationship to an accounting software package such as XERO or MYOB.         
Business Law for Accountants The term “lease”, used in the UCC, has the same meaning as...
Business Law for Accountants The term “lease”, used in the UCC, has the same meaning as used in” ~none of the choices are correct ~international financial reporting standards 16-leases ~FASB ASC paragraph 842 ~SEC staff accounting bulletin 105 ~International accounting standards 17-leases
What is neoclassical economics and when did the term begin to be used? What is the...
What is neoclassical economics and when did the term begin to be used? What is the invisible hand? What does it mean to say that markets are self-regulating? What is the economic meaning of the phrase 'laissez-faire'?
The auditor’s standard report contains standardized wording. Listed below are the sentences in the standard report....
The auditor’s standard report contains standardized wording. Listed below are the sentences in the standard report. 1- We conducted our audit in accordance with generally accepted auditing standards. 2- We believe that our audit provides a reasonable basis for our opinion. 3- In our opinion, the financial statements presented fairly, in all material respects, in conformity with GAAP. 4- Our responsibility is to express an opinion on these financial statements based on our audits. 5- Those standards require that we...
Essay Question #1 Suppose that the accounting manager of a firm you are auditing is suspected...
Essay Question #1 Suppose that the accounting manager of a firm you are auditing is suspected of manipulating sales and collection transactions to make earnings and receivable payments look higher than they are. What kinds of evidence will your audit look for? Suppose that this accounting manager wanted sales to appear lower in order to reduce tax expenses. What kinds of evidence will your audit look for in this case? Essay Question #2 When deciding how large a sample size...
in what way should the term reserve be used, if it all, in financial accounting?
in what way should the term reserve be used, if it all, in financial accounting?