Please see the below questions. Please answer based on the attached two chapters that relate to these topics. Thank you.

1. The auditing profession has struggled with the concept of materiality for a long time. Do you think that auditors would be better off if auditing standards set a specific percentage of a specific base (e.g., 1% of total assets) to provide auditors guidance on setting materiality for a specific audit or is it better to leave the determination to auditor judgment? Discuss the pros and cons of this policy change for both auditors and users.

2.

Briefly describe how each of the following factors might affect the strength of an auditee's control environment:

a)Perceived value of controls by management

b)Clearly defined lines of authority

c)Formal policies and procedures

d)Adequate personnel with proper incentives

e)Documentation

f)Adequacy of control procedures and control monitoring