In a Normal Audit, the Relationship Between the Level of Materiality

question 15

Multiple Choice

In a normal audit, the relationship between the level of materiality used to plan the engagement and the level of materiality used to evaluate evidence is:

• A) they must be identical.
• B) the former may be either higher or lower than the latter.
• C) the former is normally higher than the latter.
• D) the former is normally lower than the latter.
• E) they can never be the same.

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Definitions:

Permanent Trustee

A trustee appointed to manage and administer a trust indefinitely until the trust’s objectives are fulfilled or the trust is legally dissolved.

Chapter 7

A provision under the U.S. Bankruptcy Code allowing for liquidation of a debtor's assets to pay off creditors.

Discharge

A written federal court order signed by a bankruptcy judge stating that the debtor is immune from creditor actions to collect debt; that is, a release from liability.

Federal Court Order

A legally binding directive issued by a federal court, requiring certain actions to be taken or ceased.