When Conducting a Review Engagement,how Is Materiality Calculated

question 21

Multiple Choice

When conducting a review engagement,how is materiality calculated?

• A)materiality is not calculated as a lower level of assurance is being provided
• B)the concept of significance is used,rather than the concept of materiality
• C)always as a percentage of net income before income taxes
• D)in the same manner as an audit engagement

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Definitions:

Thrust Fault

A type of fault in which the upper block, above the fault plane, moves up and over the lower block.

Anticline

A type of fold in sedimentary rocks that resembles an arch, with the oldest rock layers at its core, indicative of compressional tectonic forces.

Syncline

a downward-curving (trough-like) fold in rock layers where the youngest materials are at the center.

Monocline

A geological fold in which all strata are inclined in the same direction, forming a step-like feature in the landscape.