How do you set limits on Materiality?
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Which one of the following statements is correct concerning theconcept of materiality?
a. Materiality is determined by reference to guidelinesestablished by the AICPA.
b. Materiality depends only on the dollar amount of an itemrelative to other items in the financial statements.
c. Materiality depends on the nature of an item rather than thedollar amount.
d. Materiality is a matter of professional judgement.
Why is it necessary to compare unadjusted misstatements to other bases of materiality, and what should an auditor do if the unadjusted misstatements exceed one or more materiality thresholds?