Your preliminary audit plan for Astro Ltd states that planning materiality is set at one per cent of total assets.This planning materiality amount:
A)will need to be used for evaluation at the end of the engagement to judge the overall presentation of the financial report, because that was the level used to set the scope of testing.
B)should not be revised in mid-audit.
C)may be revised based on the results of audit tests and new information as the audit progresses.
D)is appropriate for planning, but the evaluation materiality amount must be based on a percentage of revenue.

Question

Quizplus · Accepted Answer

Planning materiality may be revised based on the results of audit tests and new information as the audit progresses. The planning materiality amount is used to set the scope of testing, but it may be adjusted as necessary during the course of the audit. Therefore, it is not necessary to revise it mid-audit or use it for the evaluation at the end of the engagement. Additionally, there is no requirement to use a percentage of revenue for evaluation materiality.

Your Preliminary Audit Plan for Astro Ltd States That Planning