Indicate whether you agree or disagree with the following statements and explain your reasoning.Teresa Dziuba was assigned to the Heathcliff Energy audit. She was ensuring that whenrecognizing revenues, all transactions and events that should have been recorded have beenrecorded. She was testing the existence assertion.Assume materiality for the financial statements as a whole is $200,000 and performance materialityfor accounts receivable is set at $80,000. If the auditor finds one receivable that is overstated by$110,000, the auditor can ignore the error as it is less than $200,000 (overall materiality).Steve Slopak, the group partner was reviewing the work of Manny Fernandez on the Lake ShoreGold account. Manny asked Steve for an explanation on how audit risk_ould affect his work.Steve answered: “Audit risk affects the quantity and quality of evidence gathering."

During the course of Audit auditor use test of control and substantive procedure depending upon the…

Answered: Indicate

Business

Accounting

Indicate

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter7: Planning The Audit: Identifying, Assessing, And Responding To The Risk Of Material Misstatement

Section: Chapter Questions

Problem 22RQSC

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