KI is a privatelyowned company with one shareholder The shareholder is not actively involved in the business and uses KI as a source of income Required 1 Determine a range for materiality at the overall financial statement level Which factor do you think is most relevant Why 2 After speaking with KI's controller, you learn that the company received $80,000 of government assistance during the year This onetime grant for generating employment in the region was used to reduce production costs How does this influence the decision you made in part 1 3 Assume that you had established materiality at a level of $5,000 As part of your audit procedures on longterm debt, you learn that the bank has established the following debt covenants current ratio minimum 11 debttoequity ratio maximum 41 How will this new information influence your earlier materiality decision or specific audit procedures

Answer rating: 100% (QA)

This standard establishes requirements and provides direction that applies when an auditor is engaged to perform an audit of managements assessment1 of the effectiveness of internal control over finan... View the full answer