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Firs question. I notice that in the December 2018 marking scheme for risk of material misstatement, total maximum marks for materiality calculation is 4 marks for 1 mark individually. That means If i say for example, “the fee paid to the celebrity is (something) of profit and (something) of total asset and therefore it is material to financial statement. Does it mean that i get 2 marks ?
Second question. Just to double confirm with the trend calculation, Is it referring to the increase or decrease between the figures shown in two period which are 20X9 and 20X8 ? Therefore anything relevant figures in the question that can support my answer in business risk or risk of material misstatement i get 0.5 marks ?
1 I think it is saying you get 1 mark per ROMM for a materiality calculation up to ROMMs. It would be too generous to give you 2 marks for the two materiality estimates for the same ROMM.
2 Yes. if something rises/falls by 25% that trend would be interesting and indicative of a potential audit risk. If you found that something only changes 1%, then I don’t think you would get marks for concluding there was no evidence of risk. The question wants risks identified.
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