Author Question: Which of the following are major difficulties auditors face when allocating materiality to balance ... (Read 42 times)

najmarocks25 · **on:** Aug 21, 2022

Question 1

When allocating performance materiality,
◦ it is easy to predict in advance which accounts are most likely to be misstated.
◦ only overstatements need to be considered.
◦ professional judgment is critical.
◦ the sum of all the performance materiality levels cannot exceed the preliminary judgment about materiality.

Question 2

Which of the following are major difficulties auditors face when allocating materiality to balance sheet accounts?
◦

Certain accounts contain more misstatements than others.	Only overstatements need be considered.	Audit costs can affect allocation.
Yes	No	Yes

◦

Certain accounts contain more misstatements than others.	Only overstatements need be considered.	Audit costs can affect allocation.
Yes	Yes	No

◦

Certain accounts contain more misstatements than others.	Only overstatements need be considered.	Audit costs can affect allocation.
Yes	Yes	Yes

◦

Certain accounts contain more misstatements than others.	Only overstatements need be considered.	Audit costs can affect allocation.
No	Yes	No

xinyiff · **Reply #1 on:** Aug 21, 2022

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