DeVry ACCT 444 Week 1-5 Complete Quizzes
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Chapter 9<br />
8. (TCO 8) The preliminary judgment about materiality is the _____ amount by which the auditor<br />
believes the statements could be misstated and still not affect the decisions of reasonable users.<br />
(Points : 3)<br />
minimum<br />
maximum<br />
mean average<br />
median average<br />
Chapter 9<br />
9. (TCO 8) In setting materiality guidelines for current assets, the two standard setters, FASB<br />
and the AICPA, provide the following guidelines to practitioners (Points : 3)<br />
Both agree that materiality should be set at an amount greater than 10% of current assets.<br />
FASB’s guideline is greater than 10%, but the AICPA’s is greater than 5%.<br />
Both agree that it should be greater than 5%.<br />
No specific materiality guidelines are provided by either of them.<br />
Chapter 9<br />
9. (TCO 8) Auditors are _____ to decide on the combined amount of misstatements in the<br />
financial statements that they would consider material early in the audit. (Points : 3)<br />
permitted<br />
required<br />
not allowed<br />
strongly encouraged<br />
Chapter 9<br />
9. (TCO 8) When auditors allocate the preliminary judgment about materiality to account<br />
balances, the materiality allocated to any given account balance is referred to as (Points : 3)<br />
the materiality range.
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