You have been asked to calculate the level of materiality for the following organisation. The following information
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Question:
You have been asked to calculate the level of materiality for the following organisation. The following information has been provided by the client based on the unaudited figures for the current year and the audited figures for the previous year. Calculate materiality and justify any professional judgements you must make when preparing your calculation.
Potential benchmark / base | % range for base calculation | Unaudited current year $000s | Audited prior year $000s |
Revenue | 0.5 - 1% | 27,326 | 32,800 |
Net profit | 5 - 10% | 2,755 | 6,306 |
Total assets | 0.5 - 1% | 14,900 | 16,268 |
Total equity | 1 - 2% | 16,500 | 15,500 |
Related Book For
Financial and Managerial Accounting
ISBN: 978-1285078571
12th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
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