Establishing materiality and allocation of materiality to individual accounts requires considerable judgment. Access Microsofts 2009 financial statements
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a. Assume that your firm’s materiality guidelines indicate that materiality should be between three and six percent of net income before taxes. What percentage and dollar amount of materiality would you use for the audit of Microsoft? Explain.
b. What asset accounts on Microsoft’s balance sheet should be allocated the largest amount of tolerable misstatement? Explain.
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Related Book For
Auditing and Assurance services an integrated approach
ISBN: 978-0132575959
14th Edition
Authors: Alvin a. arens, Randal j. elder, Mark s. Beasley
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