In determining the level of materiality for an audit, what should not be considered?

Related Mcqs:

1. In determining the level of materiality for an audit, what should not be considered?

   A. Prior year’s errors
   B. The auditor’s remuneration
   C. Adjusted interim financial statements
   D. Prior year’s financial statements

2. ______the audit risks_______the materiality and_________the audit effort.

   A. Lower, Higher, Lower
   B. Lower, Lower, Higher
   C. Higher, Lower, Lower
   D. Lower, Higher, Higher

3. _______the audit risk,_______the materiality and _______the audit effort?

   A. Lower, Higher, Lower
   B. Lower, Lower, Higher
   C. Higher, Lower, Lower
   D. Lower, Higher, Higher

4. In an audit of financial statements, substantive tests are audit procedures that __________?

   A. May be eliminated for an account balance under certain conditions
   B. Are designed to discover significant subsequent events
   C. Will increase proportionately when the auditor decreases the assessed level of control risk
   D. May be test of transactions, test of balance and analytical procedures

5. For what minimum period should audit working papers be retained by audit firm?

   A. For the time period the entity remains a client of the audit firm.
   B. For a period of ten years
   C. For a period auditor opines them to be useful in servicing the client
   D. For the period the audit firm is in existence.

6. Which of the following factors is most important in determining the appropriations of audit evidence?

   A. The reliability of audit evidence and its relevance in meeting the audit objective
   B. The objectivity and integrity of the auditor
   C. The quantity of audit evidence
   D. The independence of the source of evidence

7. Which of the following statements is not correct about materiality?

   A. Materiality is a relative concept
   B. Materiality judgments involve both quantitative and qualitative judgments
   C. Auditor’s consideration of materiality is influenced by the auditor’s perception of the needs of an informed decision maker who will rely on the financial statements
   D. At the planning state, the auditor considers materiality at the financial statement level only

8. Which of the following is correct in relation to materiality?

   A. A matter is material only if it changes the audit report
   B. A matter is material if the auditor and the directors both decide that further work needs to be done in the area under question
   C. A matter is material only if it affects directors’ emoluments
   D. A matter is material if its omission or misstatement would reasonably influence the decisions of an addressee of the auditors’ report

9. Which of the following statements is not correct about materiality?

   A. Materiality is a relative concept
   B. Materiality judgments involve both quantitative and qualitative judgments
   C. Auditor’s consideration of materiality is influenced by the auditor’s perception of the needs of an informed decision maker who will rely on the financial statements
   D. At the planning state, the auditor considers materiality at the financial statement level
   only

10. What would most effectively describe the risk of incorrect acceptance in terms of substantive audit testing?

    A. The auditor has ascertained that the balance is materially correct when in actual fact it is not
    B. The auditor concludes the balance is materially misstated when in actual fact is not
    C. The auditor has rejected an item from sample which was not supported by documentary evidence
    D. He applies random sampling on data which is inaccurate and inconsistent