Final answer:
To choose an appropriate materiality benchmark, auditors consider lower percentages for qualitative factors such as irregularities in the object being measured or complex influencing factors, which often require qualitative assessments to capture their full impact.
Step-by-step explanation:
In deciding the appropriate percentage to apply to a selected materiality benchmark, the auditor would choose a lower percentage for qualitative factors such as irregularities in the object being measured and any other factors that affect the outcome. These qualitative factors may include the complexity of the transactions, susceptibility to fraud, company structure, or market conditions.
Auditors must consider both quantitative and qualitative data; while quantitative data is numerical and can be measured more precisely, qualitative data is descriptive and subjective, capturing the nuances and irregularities that numerical data may miss.
Qualitative assessments, such as in-depth interviews, focus groups, or analysis of content sources, provide richer data that can affect the materiality judgment.