3. Justify/Support Your Level of Planning Materiality State the factors that you considered to determine the appropriate measurement base and percentage to determine planning materiality.
3. Justify/Support Your Level of Planning Materiality State the factors that you considered to determine the appropriate measurement base and percentage to determine planning materiality.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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I just need the answer for #3 Justify/Support your level of planning materiality the measurement base and the percentage
Transcribed Image Text:December 31, 2019
1/23/2022
(In thousands)
Unaudited
1. Benchmark Data
2019
2018
Sales / Revenue
Pre-tax income
Total assets
Materiality
$1,019,890
$70,154
$389,428
$950,484
$35,757
$329,959
$1,800
2. Establish Planning Materiality Level
Measurement Base
70,154
Pre-tax income
Percentage Applied"
4.5%
Planning Materiality
$3,157
Bases and Percentage Ranges:
Profit Oriented Entties
Pre-tax income
3- 7%*
Please use this template in conjunction with Willis
& Adams Materiality Guidelines. The materiality
factors provided are guidelines only and should be
"Forpublio oompanies, 5is typioal the maximem. used only as an aid as you use professional
judgment to determine planning materiality.
Total Revenue
0.5- 3%
Total Assets
0.25 - 2%
Not-for-Profit Enties
0.5- 3%
Total Revenue
Total Assets
Mutual Fund Entties
0.25- 2%
Net Asset Value
3-5%
3. Justify/Support Your Level of Planning Materiality
State the factors that you considered to determine the appropriate measurement base and percentage to determine
planning materiality.
Measurement Base:
Enter your response here
Percentage:
Enter your response here
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