- This topic has 4 replies, 2 voices, and was last updated 5 years ago by
.
-
Posts
-
Hello sir , for the purpose of calculating the materiality for investment property, in the answer Q2b they calculate the materiality based in the whole Carrying amount and they mention its material on this basis ,
What I was thinking about , is I should calculate the materiality based on the $25000 only and not on the carrying amount ( because the management was wrong by this amount $25000( $30000-$5000) which is therefore immaterial to Fs )
ThanksActually they mention the same treatment in Q2b , but why in QA they calculate the materiality based on the CV and not based on the misstatement?
Because the carrying amount should be presented under a different classification of non-current asset in SoFP – it is not PPE but investment property.
You make it clearer for me , but in this case why based on that the auditor didn’t give a qualified opinion given that its material to FS
(a) includes assessment of materiality for performance of the audit and hence review of audit work
(b) includes assessment of misstatement – for presentation/disclosure matters the threshold is higher. If an asset is misclassified as current rather than current or vice versa that would be material because it affects ROCE, for example. But the misclassification withing non-current or non-current assets would not, in my opinion, affect decisions of the primary users.
- You must be logged in to reply to this topic.