Question

1Which of the following statements is correct concerning the concept of materiality?

	A.	Materiality depends only on the amount of an item relative to other items in the financial statements.
	B.	Materiality depends on the nature of an item rather than the amount.
	C.	Materiality is a matter of professional judgment of auditor.
	D.	Materiality is determined by reference to guidelines established by the SPK.

2Which of the following is not an audit procedure for subsequent events?

	A.	Review of audit working papers which constitute audit evidence for issued opinion
	B.	Reading latest financial statements that are available for the period after year-end
	C.	Obtaining representation letter from the management for any future event
	D.	Asking legal counsel about any litigation, claims or assessments against the company

3Which of the following(s) is (are) the types of auditors?

	A.	All of the above
	B.	Tax auditors
	C.	Government auditors
	D.	External auditors
	E.	Internal auditors

4Which of the following is not a “Standards of Field Work”?

	A.	The work is to be adequately planned and assistants are to be properly supervised.
	B.	Due professional care is to be exercised in the performance of the audit and the preparation of the report.
	C.	The auditor must obtain sufficient appropriate audit evidence by performing audit procedures to afford a reasonable basis for an opinion.
	D.	A sufficient understanding of internal control is to be obtained to plan the audit and to determine the nature, timing, and extent of tests to be performed.

5Disclosure notes are not required, because they help readers to interpret the financial statements.

True

False

6

Mandatory firm rotation in Turkey requires to switch the audit firm in every 7 years, not only the partners.

True

False

Answer 1

1. Materiality it is one of the most important aspect of auditing so, the auditor must be highly sceptical to nature and the amount of various elements of financial reporting, in order to be material or non material in terms of being reported.

So, it can be said that the material is a matter of professional judgement of auditor.

Rest of the statements like material dependence and material nature as well as reference of guidelines are not correct.

Correct answer would be Option (C). Materiality is a matter of professional judgement of auditor