2.1.1 12 13 14 15 16 17 18 1 .91 10 111 112 113 14 15 MULTIPLE CHOICE. Please highlight your answer. 1) Materiality and risk are A) reasonable concepts in planning the audit and designing an audit approach. B) typical C) optional D) fundamental 16 2) According to ASA 320, at what point should materiality be considered? A) when determining the nature, timing, and extent of audit procedures B) when evaluating the effect of uncorrected misstatements, if any, on the financial report and in forming the opinion in the auditor's report C) at all stages of audit planning D) both A and B 3) Where auditors have knowledge of specific intended users and uses, their judgement of what they consider material: A) remains unchanged. C) is based on the last audit. B) may be affected. D) none of the above 4) The Auditor's Responsibility paragraph in the auditor's report includes two important phrases that are directly related to materiality and risk. What are these two phrases? 1. 'relevant ethical requirements relating to audit engagements' 2. 'plan and perform the audit' 3. 'free from material misstatement' 4. 'reasonable assurance A) 1 and 2 B) 3 and 4 C) 2 and 3 D) 1 and 4 BA