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BPP Mock Exam 3 — impact on auditor's report

This topic has 1 reply, 2 voices, and was last updated 7 years ago by jetavi.

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February 20, 2019 at 12:37 am #505809
Lily
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- Topics: 8
- Replies: 12
Question: P329
Answer: P346
On the answer, it says:
The amount of the payment run is $490,000 which represents 6.0% of total liabilities (490/8100) and hence is a material matter.
Can I ask:
I know it would be material matter if it’s > 1% revenue/total assets or >5% of PBT.
What is the criteria of material as percentage of total liabilities? I never saw it anywhere.
Could anybody help please? Many thanks. Lily
February 22, 2019 at 7:48 pm #506255
jetavi
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- Topics: 10
- Replies: 307
Well, I haven’t come across this either… First time hearing this but from what I understand the %for total liabilities should be the same as total assets.
It only makes sense to me this way.
Hope that helps.
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