1.In deciding on the appropriate base in making a quantitative determination of materiality, auditors normally develop industry specific measures of materiality that have become generally accepted in practice.

Which of the following would be most appropriate in the case of a profit entity?

a)% to 1% of gross profit.

b)1 to 5% of total assets.

c) to 5% of normalized net income.

d) to 1% of total revenue.

2.Which of the following is a pre-engagement activity?

a)determining planning materiality.

b)ensuring the auditee will accept their responsibility for the management. representation letter.

c)performing analytical review

d)determining the overall audit strategy.

3.AXY Ltd is a private company. The auditor has assessed the risk of material misstatement and audit risk as high. Which of the following would best reflect the impact on level of detection risk?

a)The level of detection risk would increase.

b)The level of detection risk would decrease.

c)The level of detection risk would not change.

d)The auditor would require more information to assess the impact on the level of detection risk.