Materiality of Prior Period Uncorrected Misstatements: Correct Evaluation Method

A. 'Prior-period uncorrected misstatements are evaluated by following the requirements of the applicable financial reporting framework.'

This statement is correct because the evaluation of whether prior period uncorrected misstatements are material should be based on the requirements of the applicable financial reporting framework, such as generally accepted accounting principles (GAAP) or International Financial Reporting Standards (IFRS). Auditing standards provide guidance on how to evaluate materiality in the context of financial statement audits, but the evaluation of materiality for prior period uncorrected misstatements is primarily based on the financial reporting framework.