Final answer:
Materiality impacts decision-making in audits, guiding the amount and type of evidence gathered. Auditors must use judgment to select robust and relevant evidence, ensuring the accuracy and integrity of their findings.
Step-by-step explanation:
The concept of materiality plays a crucial role in an auditor's work, particularly impacting decisions about the quantity and type of evidence to gather during an audit. Judgment is critical when determining what evidence is necessary, ensuring that it supports the topic under review and meets the assignment's requirements. During an audit, auditors must gather evidence meticulously, often observing or examining their subject through multiple encounters or sources to amass a robust set of data. This gathering evidence process aims to avoid relying on insufficient or irrelevant information, therefore reducing the risk of overlooking material misstatements.
Auditors are also concerned with issues such as bias, credibility, and verifiability of information. Moreover, the presence of irregularities in the object being measured and other situational factors may affect the outcome of the audit. Careful documentation is vital, as this information contributes to the integrity of the findings and aids future research and analysis. Ultimately, an auditor selects evidence that is rooted in facts and experience, choosing the most compelling evidence that aligns with the goal of providing a true and fair view of the financial statements.