1.

Define the meaning of the term materiality as it is used in accounting and

auditing. What is the relationship between materiality and the phrase
obtain reasonable assurance in the auditors report ?
2. Explain why materiality is important but difficult to apply in practice !
3. What is meant by planned detection risk ? what is the effect on the
amount of evidence the auditor must accumulate when planned detection
risk is increased from medium to high ?
4. Define what is meant by inherent risk ! identify four factors that make for
high inherent risk in audits !
5. Explain the causes of an increased or decreased planned detection risk !
6. Describe the three broad objectives management has when designing
effective internal control !
7. Explain the difference of responsibilities for internal controls between
management and auditor !
8. What are the five components of internal control in the COSO internal
control framework !
9. What benefits does the auditor derive from planning audits ?
10.Identify the eight major steps in planning audits !
11.What factors should an auditor consider prior to accepting an engagement
? explain
12.What is the purpose of an engagement letter ? what subjects should be
covered in such a letter ?
13.Explain why auditors need an understanding of the clients industry . what
sources are commonly used by auditors to learn about the clients industry
?