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With regard to setting materiality, which of the following alternatives is best? Accounting firms may vary in the metK K m d they use to
With regard to setting materiality, which of the following alternatives is best?
Accounting firms may vary in the metK they use to set planning materiality in the risk assessment phase as long as the method is well described in the engagement letter. In selecting an appropriate benchmark, auditors can choose an item from the balance sheet or the income statement. And, the benchmark can be changed in the risk response phase.
Auditors select an appropriate benchmark using common norms about the client, the client's industry, and the needs of financial statement users for their decision making. However, auditors rely heavily on their professional judgment to determine an appropriate percentage of the selected benchmark.
Auditors select an appropriate benchmark using their professional judgment and based upon their knowledge of the client, the client's industry, and the needs of financial statement users for their decision making. Moreover, auditors rely heavily on their professional judgment to determine an appropriate percentage of the selected benchmark.
Auditors select an appropriate benchmark using their professional judgment and based upon their knowledge of the client, the client's industry, and the needs of financial statement users for their decision making. However, when determining an appropriate percentage of the selected benchmark, auditors base their decision on common norms.
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