What should the auditor consider when determining whether an account should be considered significant?
According to AS 2201:
For identifying significant accounts, AS 2201 states that “the auditor should evaluate the qualitative and
quantitative risk factors related to the financial statement line items and disclosures.” When evaluating
the quantitative risk factors, the auditor should consider planning materiality. Those financial statement
line items and/or accounts that exceed planning materiality should be considered for designation as
significant accounts for both the audit of internal control over financial reporting and the financial
statement audit. The more an account exceeds planning materiality, the greater the likelihood it should
be considered a significant account.
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