3. The SEC criticized KPMG for relying on “quantitative” measures in arriving at
materiality judgments while ignoring important “qualitative” issues relevant to
those judgments. Under what circumstances should auditors rely more heavily
on quantitative measures rather than qualitative issues in making materiality
judgments? Under what circumstances should auditors rely more heavily on
qualitative issues rather than quantitative measures in making materiality
judgments? Explain.