Which one step do you think is the most challenging for auditors when performing a audit?...
Which one step do you think is the most challenging for auditors when performing a audit? Why?
Homework Answers
Answer:
The most challenging step for an auditor in an audit is determining the materiality level for individual account and for financial statement as a whole.
As materiality depends upon various factors such as
1. Nature and size of the entity
2. Type of information available
3. Degree of risk of misstatement etc
For ex: $100 may be material for a street vendor but it may not be material for (Amazon) Jeff Bezos.
As a result, it is a challenging task for the auditor to set the materiality level as it depends upon various factors.
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