AUDITING RMU
11th Edition
ISBN: 9781260934830
Author: MESSIER
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 3, Problem 3.30P
To determine
Concept Introduction:
Internal audit is a process designed to improve and enhance the companies or organization’s operations, and help to assess the whole internal control, corporate governance, and accounting process of a business.
The amount of overall materiality for the audit
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Suppose that you are the auditor of a major retail client who has reported the following income before taxes (IBT) for the first two quarters of the year: 1st quarter = $1,200,000 and 2nd quarter = $1,500,000. You are in the process of establishing overall materiality for the client. Based on prior years, the client has a 10% decline in IBT from the 2nd quarter to the 3rd quarter. You also know that IBT in the 4th quarter increases by 25% over the 3rd quarter.
Determine the amount of overall materiality for the audit based on these preliminary amounts.
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Suppose that you are the auditor of a major retail client who has reported the following income before taxes (IBT) for the first two
quarters of the year: 1st quarter = $1,200,000 and 2nd quarter = $1.500,000. You are in the process of establishing overall
materiality for the client. Based on prior years, the client has a 10 percent decline in IBT from the 2nd quarter to the 3rd quarter.
You also know that IBT in the 4th quarter increases by 25 percent over the 3rd quarter.
Required:
Determine the amount of overall materiality for the audit based on these preliminary amounts.
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Chapter 3 Solutions
AUDITING RMU
Ch. 3 - Prob. 3.1RQCh. 3 - Prob. 3.2RQCh. 3 - Prob. 3.3RQCh. 3 - Prob. 3.4RQCh. 3 - Prob. 3.5RQCh. 3 - Prob. 3.6RQCh. 3 - Prob. 3.7RQCh. 3 - Prob. 3.8RQCh. 3 - Prob. 3.9RQCh. 3 - Prob. 3.10RQ
Ch. 3 - Prob. 3.11RQCh. 3 - Prob. 3.12RQCh. 3 - Prob. 3.13RQCh. 3 - Prob. 3.14RQCh. 3 - Prob. 3.15RQCh. 3 - Prob. 3.16MCQCh. 3 - Prob. 3.17MCQCh. 3 - Prob. 3.18MCQCh. 3 - Prob. 3.19MCQCh. 3 - Prob. 3.20MCQCh. 3 - Prob. 3.21MCQCh. 3 - Prob. 3.22MCQCh. 3 - Prob. 3.23MCQCh. 3 - Prob. 3.24MCQCh. 3 - Prob. 3.25MCQCh. 3 - Prob. 3.26PCh. 3 - Prob. 3.27PCh. 3 - Prob. 3.28PCh. 3 - Prob. 3.29PCh. 3 - Prob. 3.30PCh. 3 - Prob. 3.31PCh. 3 - Prob. 3.32P
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