Chapter 7, Problem 39RSCQ

To determine

Introduction: Auditing means the inspection of financial accounts of the company to determine if the records are accurate as per the rules and regulations of accounting or not. There are two types of auditor’s i.e. internal auditors and external auditors, which carry out the auditing process.

To state: The relation between audit risk and materiality and if an auditor need to keep in mind the level of materiality in order to judge the level of audit risk.