1.

Considering the demand for an audit, which involves stewardship; an audit will help managers receive the compensation they deserve

A. capital allocation theory

B. Motivation Theory

C. Principal / Agent theory

D. Professional skepticism theory.

2.

(1) Conceptually, to decrease the level of detection risk, the auditor does more substantive testing.

(2) when considering a preliminary judgement of materiality, if the auditor sets a higher dollar amount for materiality, rather than a lower dollar amount, more evidence is required.

A. (1) is ture; (2) is ture

B. (1) is ture; (2) is false

C. (1) is false; (2) is true

D. (1) is false; (2) is false.