Calculate materiality for the client, assuming that it is a profit-oriented company and moderate audit risk. Explain why you chose the base you did and why you chose the percentage. You may use guidelines from the textbook or the case study and should refer to the specific guidelines you used in your answer.

	Current Year	Prior Year
Sales/revenue (net)	30,381,954	26,290,518
Expenses	7,263,786	6,519,376
Gross Margin	8,378,660	7,280,887
Pre-tax Income	1,114,873	761,510
Current Assets	18,993,546	16,966,273
Current Liabilities	8,221,991	6,810,164
Total Assets	19,679,541	17,670,625

Answer rating: 100% (QA)

To calculate materiality for the client we need to consider the financial information provided and the specific guidelines or thresholds used by audit... View the full answer