Performance materiality is a smaller percentage of overall materiality, that is determined by the level of

audit risk *
True
 
What is the best audit strategy? *
effective audit at least possible cost 
 
Materiality may be used as a substantive tool * 
false
 
Performance materiality may equal the Overall materiality *
false
 
The higher the control risk *
the more extensive are the substantive procedures

Overall materiality is the level of materiality set by the auditor to assess whether the FS are free from
misstatements as a whole * 
false
 
An information is material if its omission or misstatement could influence a person's decision *
False

Which of the following audit risk components may be assessed in non-quantitative terms?
inherent risk
control risk
detection risk
all of the above 

The higher the audit risk *

the lower the materiality level and the more extensive are the substantive procedures
 
which of the following audit risk components can the auditor control? *
detection risk 
 
which of the following audit risk components exists in the absence of internal control? *
detection risk

Which of the following conditions justifies an auditor's decision of raising the materiality level? * 
internal control over revenue and receipts cycle is excellent
 
Which of the following does an auditor least likely perform in assessing audit risk? *
gather audit evidence in support of recorded transaction
 
Which of the following audit risk components may be assessed in quantitative terms?
all of the above
 
  
The other term for performance materiality * 
account balance level
 
The Audit plan must set out the detailed audit procedures to be performed appropriate to the audit
client *
False

Which type of risk does the management of a company has no control? *

detection risk
 
why should an auditor plan more work on individual accounts as lower acceptable levels of both audit
risk and materiality are established? *
to find smaller errors 
 
If the results of the auditor's test of controls induce the auditor to change the assessed level of control
risk for inventory from 0.2 to 0.4 and audit risk and inherent risk remain constant, what is the effect on
the acceptable level of detection risk? *
detection risk would decrease from 0.4 to 0.2
 
Inherent risk exists with or without the presence of the internal control systems established by the
client * 
false