Although Different Audit Firms Take Different Approaches, Performance Materiality Could

question 15

Multiple Choice

Although different audit firms take different approaches, performance materiality could be the same as overall materiality, or could be a percentage of overall materiality. Generally this range is which of the following?

• A) 25% to 75% of overall materiality.
• B) 50% to 75% of overall materiality.
• C) 25% to 50% of overall materiality.
• D) 40% to 75% of overall materiality.

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Definitions:

Stock Subscription Plan

A method through which a company offers its shares to investors or employees ahead of the general public, often at a discount or with preferential terms.

Par Value

The nominal or face value of a bond, stock, or coupon as stated by the issuer, which may differ from its market value.

Installments

Regular payments made over a period of time to pay off a debt.

Stock Subscription Plan

A financing agreement allowing investors to subscribe to a new issue of stocks, often with payment and delivery at a later date.