alleryStart learning →A 1984 discussion paper on audit risk suggests what range of net profit for materiality?
A0.5% to 1%
B1% to 2%
C5% to 10%
D2% to 5%
Answer & Solution
Correct answer: C. 5% to 10%
The suggested range is 5% to 10% of net profit, with the auditor picking a value in range by audit risk.
Keep practising Risk Assessment and Internal Control
Browse all Risk Assessment and Internal Control questions for CA Final, or explore more Auditing topics.
Related questions
Which is correct about auditors and internal control?The COSO risk assessment component involves what?A payables system matches order, receipt and invoice before paying. Which objective?Maintaining documentation to substantiate transactions is which control activity?Why did the IASB decline a uniform numeric materiality threshold?Materiality is reassessed at the conclusion of the audit before the report is issued. WhatWhat is the purpose of setting performance materiality?Which expression gives audit risk in the audit risk model?