Which of the following is not true with respect to the performance principle?

Multiple Choice

• The preparation of an audit plan is an important component of the planning and supervision in an audit.

• The risk of material misstatement is affected by both the susceptibility of the account balance to misstatement as well as the effectiveness of the auditors procedures in detecting misstatements.

• The concept of reasonable assurance permits audit teams to make mistakes and misinterpretations in evaluating evidence.

• The concept of materiality recognizes that auditors should focus on matters that are important to financial statement users.