The need for judgment in assessing materiality

Multiple-choice questions: In order to be awarded CPD units you must answer the following five random questions correctly. If you fail the test, please re-read the article before attempting the questions again

  1. Which of these statements is true regarding the practice statement issued on materiality?

  2. Which of the following represents a change in the definition of material proposed in the exposure draft?

  3. Which of the following is not included in the description of a primary user of the financial statements?

  4. Which of the following statements, if any, about primary users of financial statements is correct? Statement 1 - The common information needs of the primary users should be considered or Statement 2 - The specific information needs of individual primary users should also be considered

  5. How does publicly available information affect the assessment of the materiality of an item?

  6. Which of the items below is not included in the four-step approach outlined in the practice statement?

  7. When assessing the materiality of items, which of the following should be considered?

  8. Which, if any, of the following statements is correct? Statement 1 - Quantitative characteristics of materiality factors are more important than qualitative factors,or Statement 2 - Qualitative characteristics of materiality factors are more important than quantitative factors

  9. In the four-step approach outlined in the practice statement, what is the output of Stage 3?

  10. In the four-step approach outlined in the practice statement, what is the output of Stage 2?