Assume you are a CPA performing the planning procedures for the 2021 audit of your client, Highbrook Corp., a small owner managed business that is a non-issuer. You are preparing the materiality worksheet and you are trying to determine the proper benchmark to use in the calculation of the planning materiality threshold for the financial statements as a whole. As you are working through the calculation, you are also writing up the memo that will document your reasoning and judgment for the considerations and assumptions you use in your calculation. Prepare a memo that will be included in the audit workpapers that documents your judgment and reasoning for the initial quantitative calculation of materiality. Your memo should include the following points as they would apply to your client: 

• What are the most commonly used benchmarks used by an audit engagement team in determining planning materiality for the financial statements as a whole? What would be a suggested benchmark(s) for Highbrook Corp? 

• What is performance materiality and how does it differ from overall materiality? 

• Can materiality be revised during the audit? Why would an auditor even consider revising materiality?

Answer rating: 100% (QA)

Answer1 Auditors commonly awareness best at the topics which have a great effect on monetary statements This is because of it isnt always realistic for them to study all transactions and balances of t... View the full answer