Findings from substantive tests performed at interim dates

Preliminary evaluations of materiality, audit risk, and internal control

Whether the inquiry of the client's attorney identifies any litigation, claims, or assessments not disclosed in the financial statements

Whether the allowance for sampling risk exceeds the achieved upper precision limit

AICPA

SEC

FASB

Professional Judgement

Shareholders

Creditors

Both

Neither

The amount set above the overall materiality level

The amount necessary to get management to perform the audit appropriately

A level required to evaluate staff performance

The amount set below the overall materiality level

Determine how much error they should let management get away with

Discuss with management the required materiality levels

decide whether any omission may change the judgement of any person relying on the information

Discuss with partners any liability issues regarding materiality

Discuss the timing of the audit procedures with the client's management

Inquire of the client's attorney as to whether any unrecorded claims are probable of assertion

Identify specific internal control activities that are likely to prevent fraud

Evaluate the reasonableness of the client's accounting estimates