Below are account balances from 2025 and 2024. You are currently starting the 2025 audit and would
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Question:
Below are account balances from 2025 and 2024. You are currently starting the 2025 audit and would like to determine the materiality and performance materiality for this company. This is a company is a for profit grocery store. The company has stable and predictable income for the last 6 years. However, when it first started in 2001, the income was not stable and were negative at one point. This year, there is an ongoing strike by the union for higher wages that keeps calling out the revenue made by the company and they have been in the news every day.
| Unaudited |
|
Accounts | 2025 | 2024 |
Sales / Revenue | $388,890 | $350,484 |
Pre-tax income | $90,154 | $75,757 |
Total assets | $389,428 | $329,959 |
Materiality |
| $1,800 |
- What account will you use as the basis for your materiality and what %?
- What is the overall materiality amount?
- What is the performance materiality?
- Why is performance materiality used for?
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