changes to the syllabus p7

Does the announcement not give you a clue as to how it affects the June 2012 exam?

Hi there,

I'm unsure as to whether this is the right forum to post this, but I need some help from the tutor on the materiality guidelines.

I'm of the understanding that the below applies:
0.5-1% of Revenue
1-2% of Total Assets
5-10% Profit Before Tax,

However, if the amounts are in excess of these, I assume that it is still material - such as 12% of Profit Before Tax???

Wow! Certainly material!

What the percentages are telling you is that at least 2% of assets is always material, even in a well ordered company. But materiality may be as low as just 1% of assets in a company which carries a lot of audit risk - so eg where controls system is weak ( or unauditable ) or where there are a lot of, or just some major, inherent risks

Hi, I would like to confirm whether 2% of asset is consider material because in the question of 2008 june question 3, where it's about related party transactions. The receivable balance is $25,000, total assets is $12 million, which means it's material because it represents 2% of total assets, isn't it? But why did the answer said that it is not material? Don't really understand :(

I believe that 2% of $12 million is in the region of $240,000 and it seems therefore that $25,000 falls a bit below that figure. Maybe I should strongly advise that you take a calculator into the exam :-)