The materiality has a crucial impact on the auditor's performance since it has the potential to alter the view or opinion of a reasonable person. It is among of the matters required to be considered by the auditor in planning their audit as enacted under ISA 300 Planning an Audit of Financial Statements.

Required:

a)Assess the importance of materiality during the audit preliminary stage.

[8 marks]

b)'Audit risk discovered at the account-balance or class-of-transactions level could be material to the financial statements when aggregated with misstatements in other balances or classes and sometimes the auditor will not detect such misstatements.'

i)Based on the statement, relate with example the components of audit risk.

[9 marks]

ii)Relate the components of audit risk in c)i) above to the professional judgement

and audit approach undertaken by the auditors.[8 marks]