Match the Terms Below (A-H)with the Definitions Provided Below (1-8)

question 85

Short Answer

Match the terms below (a-h)with the definitions provided below (1-8):
a.Preliminary judgment about materiality
b.Inherent risk
c.Planned detection risk
d.Audit assurance
e.Acceptable audit risk
f.Performance materiality level
g.Control risk
h.Materiality
________ 1.A measure of the risk that audit evidence for a segment will fail to detect misstatements exceeding the performance materiality amount,should such misstatements exist.
________ 2.A measure of the auditor's assessment of the likelihood that misstatements exceeding a performance materiality in a segment will not be prevented or detected by the client's internal controls.
________ 3.A measure of how much risk the auditor is willing to take that the financial statements may be materially misstated after the audit is completed and an unqualified audit opinion has been issued.
________ 4.The materiality allocated to any given account balance.
________ 5.The maximum amount by which the auditor believes that the statements could be misstated and still not affect the decisions of reasonable users.
________ 6.This term is synonymous with acceptable audit risk.
________ 7.The magnitude of an omission or misstatement of accounting information that makes it probable that the judgment of a reasonable person would have been changed.
________ 8.A measure of the auditor's assessment of the likelihood that there are material misstatements before considering the effectiveness of internal control.

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Definitions:

Notes Receivable

Written promissory notes indicating the amounts due to be paid to the holder, recognized as assets on a company's balance sheet.

Maturity Value

The total amount payable to an investor at the end of a bond's term or the final payment due on a loan, including principal and any accrued interest.

Trade Receivables

Amounts owed to a company by its customers as a result of delivering goods or services on credit.

Accounts Receivable

The money owed to a company by its customers for goods or services that have been delivered but not yet paid for.