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Is materiality based on operating profit or PBT? I have been using the study hub and some of the answers base materiality on operating profit. Should it be used. I am confused
Use whatever is sensible in the context of the specific scenario, e.g.:
1. Partner specifies a particular profit – use that profit
2. Partner says “profit” and exhibit gives only one measure of profit – use that measure
3. Partner says “profit” and exhibit gives more than one measure of profit – include in your justification of materiality your choice of profit.
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