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Ling, an audit manager, is planning the audit of Modern Technologies, Inc., (MT, Inc.) a manufacturer of electronic components. This is the first year
Ling, an audit manager, is planning the audit of Modern Technologies, Inc., (MT, Inc.) a manufacturer of electronic components. This is the first year that Ling's audit firm has performed the audit for MT, Inc. (Click the icon to view the additional information and the asset balances and performance materiality.) Based on preliminary discussions with management, a tour of the production facility, and background reading about the electronic components industry, Ling determines the following: (Click the icon to view the additional information.) Read the requirements. Requirement a. What factors should Ling consider in setting performance materiality for the asset accounts? (Select all that apply.) A. The cost of obtaining audit evidence (efficiency). B. After tax net earnings. C. The extensive competition in the industry. D. Expected misstatements in a particular segment. E. The overall audit assurance desired.
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