alleryStart learning →An auditor sees very low audit risk. What follows for materiality?
AIt must fall sharply
BIt can be set higher
CIt is set to zero
DIt equals total profit
Answer & Solution
Correct answer: B. It can be set higher
Because audit risk and materiality are inversely related, low risk permits a higher materiality.
Keep practising Audit Planning Strategy and Execution
Browse all Audit Planning Strategy and Execution questions for CA Final, or explore more Auditing topics.
Related questions
Working papers help third parties do what?Internal audit tests the most important controls using which approach?Working papers help show that the audit was performed in line with what?Which development lets auditors analyse entire datasets instead of samples?If liquidation becomes imminent, statements are prepared on what basis?How long is the foreseeable future usually regarded under the going concern assumption?The IAASB issues which of these?Which body sets recognised standards for internal auditors?