Auditing Question(may be from US textbook, but we need to apply standards in Canada)

Hi, please provide a detailed answer to this question under Candian standards. If you have the solution manual of this question, please copy paste the original answer. I want to compare with my answers. Thanks a lot.

.5 percent to 10 percent of income before income taxes of . 0.5 percent to 1 percent of total assets of $50 million, being Because of the riskiness of this engagement, we adopted a -22 Excerpts from a co urt case appear below. The lawyer is in process of examining his client, a public accountant, accused $6 million, being $300,000 to $600,000 of negligence in the conduct of an audit. $250,000 to $500,000 Were you aware that the statements were being used by e creditor who was owed $100,000 that was secured by inven conservative approach and took a lower materiality level than we ory? Auditor: Yes, he was one of several users. would otherwise have chosen. Required In accordance with generally accepted auditing standards: : How did your audit strategy take into account the needs this creditor? a. List the factors that you would consider in this situation. How would materiality affect the extent of audit testing? List any uditor: We assessed the engagement as being slightly riskier usual. other matters that would be relevant. And how did you determine materiality to be $250,000?b. Discuss the relationship between materiality and audit risk. Were these concepts appropriately considered in the situation uditor: We used principles in accordance with generally described above? ted auditing standards, namely: (CICA adapted)