Establishing materiality and allocation of materiality to individual accounts requires considerable judgment. Access Dell's 10K report with financial statements for the year ended January 29, 2021, from the company's Web site atwww.dell.com(follow links for "About us," "investors," and "financials", and "SEC Filings ).

Prompts:

a. Assume that your firm's materiality guidelines indicate that materiality should be between three and six percent of net income before taxes. What percentage and dollar amount of materiality would you use for the audit of Dell? Explain.

b. What asset accounts on Dell's balance sheet should be allocated the largest amount of performance materiality? Explain