The following are concepts discussed in Chapter 8 and this chapter:
1. Preliminary judgment about materiality
7. Estimated total misstatement in a segment
2. Control risk 8. Planned detection risk
3. Risk of fraud 9. Estimate of the combined misstatement
4. Inherent risk 10. Significant risk
5. Risk of material misstatements 11. Acceptable audit risk
6. Known misstatement 12. Performance materiality
Requireda. Identify which items are audit planning decisions requiring professional judgment.
b. Identify which items are audit conclusions resulting from application of audit procedures and requiring professional judgment.
c. Under what circumstances is it acceptable to change those items in part a. after
the audit is started? Which items can be changed after the audit is 95 percent
completed?
