materiality

Question 1

planning stage vs evaluation stage are no longer.

now its just performance materiality

Answer 1

performance materiality- the amounts set by the auditor at less than materiality for the financial statements as a whole to reduce to an appropriately low level the probability that the aggregate of uncorrected or undetected misstatements exceeds materiality for the financial statements as a whole; if applicable it is also the amounts set by the auditor at less than the materiality levels for particular classes of transactions, account balances or disclosures.

less than materiality as a whole because we are building a little bit of a cushion in there

Question 2

tolerable misstatement

Answer 2

the application of performance of materiality to a particular sampling procedure.

refers to the allocation of materiality to individual audit areas.

Question 3

documentation requirements for materiality

Answer 3

materiality for f/s as a whole

materiality levels for specific classes of transactions, account balances, or disclosures

performance materiality

any revisions to those considerations during the audit engagement

Question 4

materiality has ________ components

Answer 4

quantitative and qualitative