It is February 1, 2020, and you are an audit senior at Ben & Jerry LLP (B&J) working on the December 31, 2019, year-end audit for Nice Life Inc. (NLI). This is only B&J's second year as NLI's external auditor. In the prior year, all phases of the audit were performed after the year-end. NLI is a privately owned, lifestyle members-only wellness club situated in Green Valley, Ontario, with resources that include a bar and restaurant, squash and tennis courts, a pool, canoe, and kayak rentals, boat docking, and a gym. Jerry, the partner on the engagement, has asked for a preliminary discussion about the engagement. Jerry begins, "NLI has provided us with the internal financial statements for December 31, 2019, year-end (Appendix I). Prior to our planning meeting with the client next week, I would like you to determine materiality, including performance materiality. I would also like you to analyze the risk of material misstatement at the financial statement level, including the different components of risk.

Answer rating: 100% (QA)

Materiality Materiality could be a concept or convention within auditing and accounting regarding the importancesignificance of an amount transaction or discrepancy1 the target of an audit of monetary ... View the full answer