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Audit: Qualitative benchmarks an auditor can use to assess materiality

What are the qualitative benchmarks an auditor can use to assess materiality? How can an auditor use both qualitative and quantitative measures to make a better assessment of materiality?

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Some qualitative benchmarks an auditor can use to assess materiality include:

Total expenditures in a cash accounting environment.
An assessment of potential risk
The impact of environmental, economic and regulatory conditions on the client's financial reports.
The organization's potential to respond to various degrees of risk.
An assessment of the risk of material misstatement.

Materiality has qualitative aspects to it. This refers to the notion that a misstatement or omission of information can be significant to users of financial statements due to the nature of them. Auditors may need to review financial statements to ...

Solution Summary

The solution provides a qualitative benchmark an auditor can use to assess materiality. The qualitative and quantitative measures to make a better assessment are given..

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