Answered: materiality

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The auditor’s report in the U.S. does not provide the user with details on the level of materiality that the auditor used during the audit. Do you think that the audit report should disclose materiality levels? Why might the user find such information useful? Why might auditors hesitate to publicly reveal the level of misstatement that they will accept as “immaterial”? Would management have a preference regarding the public disclosure of materiality?

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