Client Acceptance And Planning

Question 1

PSA 320 requires the auditor to determine three levels of materiality, namely:

Answer 1

1. Overall materiality
2. Performance materiality
3. Specific materiality

Question 2

Analytical procedures used in planning an audit should focus on:

Answer 2

Enhancing the auditor’s understandings of the client’s business and identifying potential risk.

Question 3

Indicators of related party transactions (2).

Answer 3

(1) Kapag nagpautang ka nang walang guaranty

(2) Kapag nakapag-utang ka at significantly below market rate of interest

Question 4

(T/F) Projecting an error rate by comparing the results of a statistical sample with actual population characteristics is an analytical procedure.

Answer 4

False. Sampling procedure.