View question 3 feedback The objective of an audit is to provide reasonable

View question 3 feedbackThe objective of an audit is to provide reasonable assurancethat the financial statements taken as a whole are free frommaterial misstatement. In determining the basis of materiality,the practitioner should do which of the following?a)Calculate materiality as 5% of net income after tax.b)Consider the overall financial statement level risk assessment.c)Consider external users and why they are interested in the financial results.

d)Adjust net income for performance bonuses included in management's normal remuneration.View question 4 feedbackYou are planning a continuing audit engagement. Several newevents and factors have been identified in the planning stage.Which of the following would prompt you to consider reducingmateriality from the prior year?

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View question 5 feedbackBarnes Whitby, an audit senior on the Clown Fish Inc.engagement, is explaining to the junior on the engagementthe relationship between audit risk and materiality. Which ofthe following explanations about the relationship betweenaudit risk and materiality is accurate?