Which of the following statements is not correct about materiality?
- The concept of materiality recognizes that some matters are important for fair presentation of financial statements in conformity with GAAP, while other matters are not important.
- An auditor considers materiality for planning purposes in terms of the largest aggregate level of misstatements that could be material to any one of the financial statements.
- Materiality judgments are made in light of surrounding circumstances and necessarily involve both quantitative and qualitative judgments.
- An auditor’s consideration of materiality is influenced by the auditor’s perception of the needs of a reasonable person who will rely on the financial statements.