Using the Bargain Cart Financial Statements and Information below answer the following questions:

1. Assume that you are engaged to audit The Bargain Cart. The audit report is written for the benefit of a variety of stakeholders list who you believe are the top five key stakeholders for The Bargain Cart who might rely on the information contained in the report.

2. Based on information contained in the cases and an analysis of the balance sheet and income statement for The Bargain Cart, suggest three potential bases and percentage ranges for each base that you believe should be considered to use in establishing planning materiality for The Bargain Cart. Provide rationale for why financial statement users might emphasize the suggested bases and why higher or lower percentages for each range might be selected.

3. Based on your analyses, conclude what you believe is the best approach in planning materiality for the 2013 audit engagement for the Bargain Cart. Carefully document your recommendation using arguments that you believe would be most defensible to internal and external stakeholders (e.g., partners, internal quality review teams, external regulators like the PCAOB and SEC, judicial stakeholders like judges and juries, and the media).

4. For the benefit of enhancing audit efficiency during the engagement, discuss tolerable misstatement and various ways that it can be determined. Discuss strengths and weaknesses of different approaches.

5. Discuss reasons for conducting follow-up procedures for issues encountered during the audit that are below materiality. Why should an auditor consider such immaterial issues?