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Dear Kim,
When assessing the materiality of particular risk, whether the risk is material or not.
Would it be sufficient to say that amount is 5X or 10X materiality level to get the marks?
Should also include the % out of total assets or revenue as it was under old examination scheme?Thanks
At the completion stage when evaluating misstatements you would say such-and-such is x% of appropriate benchmark(s) and therefore material/not material.
In planning – with the new approach that includes professional marks – you calculate and justify a $ amount based on the instruction in the partner’s email – so say you calculate 5% and 10% of PBT is $0.6m to $1.2m and then you justify $0.6m because it’s a new audit client. Thereafter you simply say that such-and-such is more/less than $0.6m and therefore material/immaterial – that’s what it means to apply it consistently.
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