Materiality

Question 1

Auditor’s responsibility

Answer 1

1) Preliminary Assessments

2) Revise assessments throughout audit

Question 2

Qualitative and Quantitative factors to assess materiality

Answer 2

1) % application to appropriate financial statement benchmark
2) Interim/Annualized Financial Statements
3) Prior period and current period results
4) Changes in industry, economy, circumstances

Question 3

Performance Materiality

Answer 3

Amount set at less than Materiality for F/S as a whole to reduce probability that uncorrected and undetected misstatements exceeds F/S as a whole