ACCY 131 - In-Class Assignment 4 1. You are auditing company XYZ, an entity that rents numerous business properties to serve as offices and warehouses for its business. You have been assigned to audit rent expense and your supervisor has asked you to do so by performing analytical procedures. The financial year you are auditing ended on December 31, 2020 You gather the following information. Rentals for the previous financial year (2019) were $365,000 The changes that have taken place during the financial year concerning rentals are: A new rental property was rented starting January 2020 with an annual rental price of 35,000 Rental prices for the rest of the properties increased by an average of 5 % compared to the year 2019 The client's recorded rental expense is $395,000 Required 1. Develop an expectation for rental expense for 2020 2. Define a tolerable difference (Use 2% or 5% of the expected amount.) 3. Explain why you have chosen to use 2% or 5 %