Martin Inc

question 40

Multiple Choice

Martin Inc.is being audited by the firm MNE and Associates.MNE's auditors decide that $100 million is the planning materiality and $50 million is the appropriate performance materiality at the account level.If all of Martin's account balances are below $50 million, the auditors will:

• A)still perform detailed some audit procedures on the account because the immaterial misstatements can be material in aggregate.
• B)to perform detailed audit procedures on the accounts because the sum of Martin's accounts is greater than $50 million.
• C)end audit procedures, both detailed and on controls, because performance materiality has reduced the probability that the sum of immaterial and/or undetected misstatements in the financial statements is less than materiality for the financial statements as a whole.
• D)check the auditing standard guidelines for the determination of performance materiality.

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