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Sir, the materiality levels in OT note differs from that of Bpp, pls confirm these for me:
Profit before tax. 5%
Gross profit. 0.5% – 1%
Total assets. 1% – 2%
Net assets. 2% – 5%
Profit after tax. 5% – 10%
Revenue. 0.5% – 1%Thank you.
It seems that BPP has gone into greater detail than the OT notes
However, these guidelines are literally that – guidelines.
They are not intended to be prescriptive nor exclusive
Does the BPP version quote a source for their information? I’d be very interested to read that source
OK sir, compare the ones I pick from BPP with this of OT:
OT materiality guideline:
between 1/2% and 1% turnover
between 1% and 2% of net assets;
between 5% and 10% of net profit.
Why the diff in net asset and net profit?
I want to establish whether any syllabus changes affected this area.
Thank you
This is from an internet item posted in 2009:
“Traditional benchmarks include:
½ – 1% of turnover
5 – 10% of profit before tax
1 – 2% of gross assets”Is your question about why OT post says “net” assets and “net” profit where the traditional benchmark says “gross” assets and “profit before tax”?
These matters are guidance only. They are not written in biblical tablets of stone. They are suggestions as to what base you should use in assessing the materiality of an inconsistency.
Don’t get so wound up about the minutiai of something that is, itself, mere guidance
I’m not aware of any syllabus changes that have affected this area. In fact, I cannot even begin to imagine how a change in the syllabus could possibly have an affect in this area!
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