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i)International standard on auditing 320 (ISA 320) materiality in planning and performing guides auditors on...

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Accounting

i)International standard on auditing 320 (ISA 320) materiality in planning and performing guides auditors on how to asses audit Materiality and Audit Risk.

Required Using the audit risk model, explain what audit risk is

ii) Auditors are auditing the firm and have assessed the inherent risk and control risk, to be 25% and 15% respectively. If auditors want to keep audit risk relatively low at 2%,

Required a) Calculate the detection risk? And interpret what it means

b) Explain some factors that the auditors would have considered when assessing risk levels in question (ii) above

iii)Game Inc. is being audited by the firm KPMG and Associates. KPMGs auditors decide that K100, 000 is the planning materiality and K50, 000 is the appropriate performance materiality at the account level.

Required a) If all of Games account balances are above K50, 000, what advice would you give to the auditors.

b) What advice would you give to the auditors if all of Games account balances were below K50, 000?

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