Performance materiality is used for assessing the risks of material misstatement and determining the nature,timing,and extent of audit procedures to perform during the audit opinion formulation process.

Question

Quizplus · Accepted Answer

Performance materiality is a key component in the audit planning process and is used to determine the amount of misstatement that would be considered material for each account or balance, as well as the level of assurance that is required for each account or balance. The auditor then uses this information to design and perform audit procedures that are tailored to the specific risks and materiality thresholds for each account or balance.

Performance Materiality Is Used for Assessing the Risks of Material