Materiality should be continually reassessed during the audit as new information comes to light.

• A. Yes, continually
• B. No, it remains fixed
• C. Only if fraud is suspected
• D. Only at interim review

Answer: (A)

Materiality is not a fixed number. As an audit progresses, new information, findings from testing, or changes in risk can affect what would be considered material to the financial statements. Because of that, the auditor revisits and may revise the materiality level to ensure it still reflects users’ needs and the current risk environment. This keeps the scope and emphasis of the audit appropriate as evidence comes to light and circumstances change.

So, continually reassessing materiality whenever new information becomes available ensures misstatements are evaluated against an up-to-date threshold, which helps determine what to test and what could be material if uncorrected. The other options imply rigidity or limiting reassessment to specific triggers, which would miss the dynamic nature of auditing.