IIA Exam IIA-CFSA Topic 10 Question 45 Discussion

Actual exam question for IIA's IIA-CFSA exam

Question #: 45
Topic #: 10

Not all misstatements will be material enough to affect the fair presentation of the financial statement. A material misstatement is one that the auditors determine would change or influence the option of a reasonable person relying on the financial statements for information. Ultimately, auditors must exercise judgment to assess materiality based on the qualitative nature of the misstatements and their quantitative extent. Materiality is also based on auditors' assessment of control risk levels in the organization. The following factors may influence the auditors' assessment of control risk EXCEPT:

AManagement's awareness or lack of awareness of applicable laws and regulations

BClient policy regarding such matters as acceptable operating practices and codes of conduct

CAssignment of responsibility and delegation of authority to deal with such matters as
organizational goals and objectives, operating functions, and regulatory requirements

DNone of these

Show Suggested Answer

Suggested Answer: D

by Chantell at Feb 10, 2024, 12:01 PM

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7 months ago

I think this question is quite tricky. Materiality is such an important concept in auditing.

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