Hello sir can u please clarify the following two doubts of mine
1) 5-10% of profit.b.t is acceptable range and is not material
But in some of the answers in bpp i havr noticed that when the mistatement is 7% of p.b.t they have considered it as material. I cannot understand why
Could you please tell me if there is any mistake in my understanding.
2) substantive procedure for completeness of purchases
For a sample of purchase orders trace it to GRN and purchase invoice and agree that the relative purchases are recognised in the purchase day book.. i have come up with this substantive procedure on my own.. could u please tell me if this is an appropriate procedure
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Doubts
Please do ignore part 2 of my doubt .. i am not able to edit my post
Thankyou for your time
9y ago#2All three of the materiality indicators (based on turnover, assets and profit) ate given as ranges eg 0.5% to 1% of turnover. Usually best to take the lower end of the range in a question when deciding on materiality.
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