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Terms in this set (51)
What is the materiality level that an Performance materiality
auditor uses for determining
significant accounts, significant
locations, and audit procedures for
those accounts and locations?
An auditor has determined The auditor should perform additional substantive
performance materiality has been audit procedures
set too high at the beginning of the
audit. Which procedures should this
auditor consider to detect
misstatements?
Which risk exists at the overall Risk of material misstatement
financial statement level and at the
assertion level and can be
categorized as involving inherent risk
and control risk?
, What represents an identified and Significant risk
assessed risk of material
misstatement that requires special
audit consideration?
What is the impact on the amount of The acceptable audit risk is reduced.
acceptable audit risk if an auditor
believes the chance of financial
failure of a client is high?
Which factor should lead an auditor The account balance consists of a large number of
to assess inherent risk as high? complex transactions.
Which factor would lead an auditor The client's use of information technology is
to assess client business risk at a incompatible across systems and processes.
higher level?
An auditor determines overall 75% of $500,000
materiality of $500,000 would be
material to the income statement
and $1,000,000 would be material to
the balance sheet. Which amount
would an auditor typically assess
performance materiality to be for
this client?
At which percentage do auditors 5% of planning materiality
commonly set posting materiality?
What is quantitative evaluation? Determining whether the upper limit of the
possible deviation rate exceeds the tolerable
deviation rate
Questions And Answers | With 100% Correct
Answers graded A+ Guaranteed Success!!
Save
Terms in this set (51)
What is the materiality level that an Performance materiality
auditor uses for determining
significant accounts, significant
locations, and audit procedures for
those accounts and locations?
An auditor has determined The auditor should perform additional substantive
performance materiality has been audit procedures
set too high at the beginning of the
audit. Which procedures should this
auditor consider to detect
misstatements?
Which risk exists at the overall Risk of material misstatement
financial statement level and at the
assertion level and can be
categorized as involving inherent risk
and control risk?
, What represents an identified and Significant risk
assessed risk of material
misstatement that requires special
audit consideration?
What is the impact on the amount of The acceptable audit risk is reduced.
acceptable audit risk if an auditor
believes the chance of financial
failure of a client is high?
Which factor should lead an auditor The account balance consists of a large number of
to assess inherent risk as high? complex transactions.
Which factor would lead an auditor The client's use of information technology is
to assess client business risk at a incompatible across systems and processes.
higher level?
An auditor determines overall 75% of $500,000
materiality of $500,000 would be
material to the income statement
and $1,000,000 would be material to
the balance sheet. Which amount
would an auditor typically assess
performance materiality to be for
this client?
At which percentage do auditors 5% of planning materiality
commonly set posting materiality?
What is quantitative evaluation? Determining whether the upper limit of the
possible deviation rate exceeds the tolerable
deviation rate
