Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Question
Chapter 8, Problem 25.2MCQ
To determine
Identify the option that is expected to detect misstatements that aggregate.
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In considering materiality for planning purposes, an auditor belives that misstatements aggregate P100,000 would have a metrial effect on an entity's income statement, but that miststatement would have to aggregate P200,000 to materially effect the balance sheer. Ordinarilu, it would be appropriate to design procedures that would be expected to detect misstatements that aggregate.
A. P100,000
B. P200,000
C. 150,000
D. P300,000
You are reviewing the results of the Firestone audit. These are the details of the summay of identified misstatements:
• Allowance for Doubtful Accounts: $60,000 misstatement (over) • Sales Revenue: $10,000 misstatement (under)
• Total identified misstatements: $50,000 (impact on Assets, pre-tax income, and equity)
• Performance materiality was set at $60,000
REQUIRED:
a) If overall materaility for the audit was set at $30,000, what type of audit report would be issued? Why?
b) If overall materiality for the audit was set at $75,000, what type of audit report would be issued? Why?
In considering materiality for planning purposes, an auditor believes that misstatements aggregating 1% of the total assets, where total assets is P1,000,000 would have a material effect on an entity’s balance sheet, but that misstatements would have to aggregate 5% of gross margin, where gross margin is P4,000,000 to materially affect the income statement. Ordinarily, it would be appropriate to design auditing procedures that would be expected to detect misstatements that aggregate
Group of answer choices
P300,000
P150,000
P100,000
P200,000
Chapter 8 Solutions
Auditing And Assurance Services
Ch. 8 - Prob. 1RQCh. 8 - Prob. 2RQCh. 8 - Prob. 3RQCh. 8 - Prob. 4RQCh. 8 - Prob. 5RQCh. 8 - Prob. 7RQCh. 8 - Prob. 8RQCh. 8 - Prob. 9RQCh. 8 - Prob. 10RQCh. 8 - Prob. 11RQ
Ch. 8 - Prob. 12RQCh. 8 - Prob. 13RQCh. 8 - Your client, Harper Company, has a contractual...Ch. 8 - Prob. 15RQCh. 8 - Prob. 16RQCh. 8 - Prob. 17RQCh. 8 - Prob. 18RQCh. 8 - Prob. 19RQCh. 8 - Prob. 20RQCh. 8 - Prob. 21RQCh. 8 - Prob. 22RQCh. 8 - Prob. 23.1MCQCh. 8 - Prob. 23.2MCQCh. 8 - Prob. 23.3MCQCh. 8 - Prob. 24.1MCQCh. 8 - Prob. 24.2MCQCh. 8 - Prob. 24.3MCQCh. 8 - Which one of the following statements is correct...Ch. 8 - Prob. 25.2MCQCh. 8 - Prob. 25.3MCQCh. 8 - Prob. 26.1MCQCh. 8 - Prob. 26.2MCQCh. 8 - Prob. 26.3MCQCh. 8 - Prob. 27DQPCh. 8 - Prob. 28DQPCh. 8 - Prob. 32DQPCh. 8 - Prob. 33DQPCh. 8 - Prob. 34DQPCh. 8 - Prob. 35DQP
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