If $15,000 is considered to be material to the income statement, but $25,000 is material to the balance sheet, the auditor shoul

Question

3 years ago

5

d set overall materiality at which of the following dollar amounts?
a. $20,000
b. $25,000
c. $40,000
d. $15,000

1 answer:

Elanso [62] · Answer 1 · 2022-03-11T12:57:37+03:00

Answer:

The correct option is d.

Explanation:

It is given that $15,000 is considered to be material to the income statement, but $25,000 is material to the balance sheet.

Material to the income statement = $15,000

Material to the balance sheet = $25000

The auditor should set overall materiality according to the income statement.

The auditor should set overall materiality at $15,000.

Therefore the correct option is d.