Performance Materiality Helps the Auditor to Determine Which of the Following

question 72

Multiple Choice

Performance materiality helps the auditor to determine which of the following?

• A) Extent of audit evidence needed.
• B) The specific analytical procedures to perform.
• C) The specific substantive procedures to perform.
• D) Control risk assessment.

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Definitions:

Market Ratio

A financial ratio used to evaluate the performance, value, and profitability of a company within the marketplace.

Book Ratio

A financial ratio that compares a company's book value to some other indicator, often used in the context of a price-to-book ratio.

Inventory Turnover

A financial ratio indicating how many times a company has sold and replaced inventory over a period.

Days' Sales

A financial ratio that measures how efficiently a company uses its inventory by calculating the average number of days the company takes to sell its inventory.