Question: Materiality is a term often used in auditing. Determining materiality involves the exercise of professional judgement. As a starting point, a percentage is often applied

Materiality is a term often used in auditing. Determining materiality involves the exercise of professional judgement. As a starting point, a percentage is often applied to a particular benchmark.

(a) Give examples of four items that are commonly used as benchmarks for materiality.

(b) What factors may affect the identification of an appropriate benchmark?

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