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
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
Chapter9: Responsibility Accounting And Decentralization
Section: Chapter Questions
Problem 5PB: Financial information for Lighthizer Trading Company for the fiscal year-ended September 30, 20xx,...
Related questions
Question
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 |
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Auditing: A Risk Based-Approach (MindTap Course L…
Accounting
ISBN:
9781337619455
Author:
Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:
Cengage Learning
Essentials Of Business Analytics
Statistics
ISBN:
9781285187273
Author:
Camm, Jeff.
Publisher:
Cengage Learning,
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Auditing: A Risk Based-Approach (MindTap Course L…
Accounting
ISBN:
9781337619455
Author:
Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:
Cengage Learning
Essentials Of Business Analytics
Statistics
ISBN:
9781285187273
Author:
Camm, Jeff.
Publisher:
Cengage Learning,