Question

Investment and property schedules are presented for purposes of additional analysis in an auditor-submitted document. The schedules are not required parts of the basic financial statements but accompany the basic financial statements. When reporting on such additional information, the measurement of materiality is the:

a. Same as for the basic financial statements
b. Lower than for the basic financial statements
c. Higher than for the basic financial statements
d. Determined separately for each schedule

Answer 1

The measurement of materiality for additional schedules accompanying basic financial statements is determined separately for each schedule, as the auditor's assessment caters to the specific nature of the additional information.

Step-by-step explanation:

When reporting on additional information such as investment and property schedules that accompany the basic financial statements, the measurement of materiality is determined separately for each schedule.

This means that the auditor assesses materiality for these schedules independently from the basic financial statements because the nature, timing, and extent of audit procedures applied to this information might differ from those applied to the financial statements.

This is due to various factors such as user needs, legal requirements, or the possible effect of misstatements on the economic decisions of users.