Test Hints ACC 655 Fall 2011 (1) - ACC 655 Test Hints Exam...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
ACC 655 Test Hints Exam 1 FALL 2011 Overall: Understand inherent risk factors. Understand the risk model and how it affects audit work. Understand materiality and how tolerable misstatement is related. Be able to identify qualitative factors and quantitative factors for materiality. Materiality consideration is presented throughout the audit process and involves both qualitative and quantitative factors. Quantification of materiality is an inherent aspect of the audit practice and previous literature suggests that auditors traditionally used quantitative rules in their judgments on materiality (eg Holstrum and Messier, 1982; Chewning, Pany and Chan, 1989; Chewning, Wheeler and Chan, 1998, Messier, Martinovic-Bennie and Eilifsen, 2005). Moreover, the most previous studies show that the most important factor which is used to determine materiality is a percentage of 5% of net income, method known in literature as "the rule of thumb". However, this method can cause the situation in which auditor does not take into account the
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/30/2011 for the course ACCOUNTING 655 taught by Professor Lee during the Spring '11 term at Prince George's Community College, Largo.

Page1 / 2

Test Hints ACC 655 Fall 2011 (1) - ACC 655 Test Hints Exam...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online