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What is materiality in an audit context?

  1. A Information is material if omitting or misstating it could influence users' economic decisions
  2. B Any amount above one lakh
  3. C Only balance sheet items
  4. D Amounts specified by the client
Answer

Information is material if omitting or misstating it could influence users' economic decisions

Materiality is judged by both size and nature. A small amount involving fraud or related parties can be material by nature alone.

All CA MCQs

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