Which of the following is correct in relation to materiality?
AA matter is material if its omission or misstatement would reasonably influence the decisions of an addressee of the auditors’ report
BA matter is material only if it changes the audit report
CA matter is material if the auditor and the directors both decide that further work needs to be done in the area under question
DA matter is material only if it affects directors’ emoluments
Correct answer
A. A matter is material if its omission or misstatement would reasonably influence the decisions of an addressee of the auditors’ report
Explanation
A matter is material if its omission or misstatement would reasonably influence the decisions of an addressee of the auditors’ report is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.