Your preliminary audit plan for Solar 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 except in unusual circumstances and the audit planning procedures and documentation will need to be redone.
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 is set at the planning stage of the audit and may be revised based on the results of audit tests and new information as the audit progresses. It is used as a benchmark for determining the nature, timing, and extent of audit procedures. Therefore, it may need to be revised during the audit to ensure that the audit remains effective and efficient.

Your Preliminary Audit Plan for Solar Ltd States That Planning