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Basic questions for an auditing review sheet, please answer:
Materiality:
Problem 1: Understand materiality what it means, and related key concepts.
Problem 2: How is materiality used in the planning phase, and substantive phase of the audit.
Problem 3: Impact of materiality on detection risk and extent of audit procedures.
Problem 4: Purpose of materiality calculated during planning.
Problem 5: If a different materiality is calculated for different statements what determines which one to pick (remember materiality is supposed to be just 1 number for all of the financial statements.)
Problem 6: The 3 levels of materiality and what they mean.
Problem 7: What qualitatively and quantitatively impacts the determination of materiality.
Entity A had a plantation forest that is likely to be harvested and sold in 30 years.- The income should be accounted for in the following way:
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