Identify the Two Levels of Materiality That Are Important in Audit

question 2

Essay

Identify the two levels of materiality that are important in audit planning and indicate the reason for each level.

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Definitions:

Perceptual Benefits

The advantages or positive outcomes perceived by consumers, often subjective and based on personal interpretation of a product or service’s attributes.

Functional Benefit

The practical or utilitarian advantage that a product or service provides to its users.

Psychological Benefit

The emotional or mental gain derived from a product or service, which can include feelings of pleasure, satisfaction, or well-being.

Perceptual Benefit

Perceptual benefit refers to the subjective value or advantage that consumers perceive in a product or service, which influences their decision-making process.