Discuss CFA Institute ESG-Investing Exam Topic 8 Question 27

Performance materiality:

Ais usually higher than overall materiality

Bis set lower when financial controls are strong.

Ccan indicate the auditor's level of trust in a company's financial systems.

Suggested Answer: A

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23 comments · newest first

Rodolfo 4 days ago

I lean towards A. Higher thresholds can simplify the audit process.

Marva 10 days ago

True, but C really captures the essence of auditor trust.

Aja 15 days ago

I feel B is relevant. Strong controls mean less risk, right?

Stevie 20 days ago

But A could be right too. Higher performance materiality makes sense.

Jenelle 25 days ago

Agreed! C shows the auditor's confidence in the systems.

Krissy 1 month ago

I think C is the best choice. Trust is key for auditors.

Allene 1 month ago

True, but A can also be a factor in some audits.

Lorriane 1 month ago

I feel C captures the essence of performance materiality well.

Sage 2 months ago

Exactly, B could be true in some cases.

Antione 2 months ago

B is interesting. Strong controls mean lower risk, right?

Erick 2 months ago

But A could lead to overlooking issues. C is safer.

Carolynn 2 months ago

A seems plausible too. Higher performance materiality?

Kristeen 2 months ago

I agree, C makes sense. Trust is key in audits.

Lenna 2 months ago

I think C is the best choice. It shows auditor trust.

Hortencia 3 months ago

B) is true if the controls are really strong, I’ve seen it happen!

Caitlin 3 months ago

Wait, really? I thought performance materiality was always lower.

Mabel 3 months ago

C) makes sense, trust in systems affects materiality.

Howard 3 months ago

I disagree, B) doesn't always hold true.

Jamal 3 months ago

A) is definitely true, performance materiality is usually higher.

Maxima 3 months ago

I feel like performance materiality is often higher than overall materiality, but that seems counterintuitive to me.

Meaghan 5 months ago

I practiced a similar question where performance materiality was linked to the strength of financial controls, so I think it might be set lower when controls are strong.

Tammy 5 months ago

I remember discussing how performance materiality can reflect the auditor's trust in the company's controls, but I can't recall the exact details.

Shay 5 months ago

I think performance materiality is usually set lower than overall materiality, but I'm not completely sure.

CFA Institute ESG-Investing Exam - Topic 8 Question 27 Discussion