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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

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
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