Day: September 19, 2025

For each of the following statements, select whether they are true or false in respect of the concept of materiality.

Statement 1 – Materiality should be calculated at the planning stage of all audits.

Statement 2 – Once established, the materiality level initially set CANNOT be revised during the audit.

Statement 3 – Materiality will influence the audit opinion given..

Identify whether the statements made above are true or false?

Select ONE answer:

1. Statement 1. True and Statement 2. False and Statement 3. True
2. Statement 1. False and Statement 2. False and Statement 3. True
3. Statement 1. True and Statement 2. True and Statement 3. False
4. Statement 1. False and Statement 2. True and Statement 3. True

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct => Statement 1 is True as materiality needs to be calculated at the audit planning stage to provide a guide as to the extent of audit procedures required. Statement 2 is False as materiality can be revised during the audit, as the assessment of audit risk changes. Statement 3 is True — > the materiality level set will have an impact on the audit opinion as the existence of material unadjusted errors and misstatements will lead to a qualified audit opinion.
2. Not correct
3. Not correct
4. Not correct

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