195k views
0 votes
Which of the following is a principle underlying an audit conducted in accordance with GAAP?

Option 1: Materiality
Option 2: Consistency
Option 3: Conservatism
Option 4: Comparability

User Ronline
by
6.6k points

1 Answer

2 votes

Final answer:

An audit conducted in accordance with GAAP is underpinned by the principle of materiality, which guides the significance of financial information in decision-making.

Step-by-step explanation:

One of the principles underlying an audit conducted in accordance with Generally Accepted Accounting Principles (GAAP) is materiality. Materiality refers to the significance of financial information to users' decisions. Information is material if its omission or misstatement could influence the economic decisions of users taken on the basis of the financial statements. Consistency, conservatism, and comparability are also important concepts in financial reporting, but they are not specific to the auditing process.

User Rob Starling
by
8.0k points