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Materiality conclusion

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › Materiality conclusion

  • This topic has 4 replies, 2 voices, and was last updated 8 years ago by MikeLittle.
Viewing 5 posts - 1 through 5 (of 5 total)
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  • November 17, 2016 at 7:09 am #349472
    numera
    Member
    • Topics: 30
    • Replies: 44
    • ☆☆

    hi
    in most matters to be considered questions, theres always one current and one last years figure of -Profit /Assets/Revenue given.

    i understand the fact that we calculate this years materiality with the help of those figures.

    but what is the main objective of giving us last years amounts as well?
    i seemed to have missed the point.

    thanks.

    November 17, 2016 at 7:10 am #349474
    numera
    Member
    • Topics: 30
    • Replies: 44
    • ☆☆

    sorry the topic was meant to be “materiality calculation”
    i accidentally wrote conclusion.
    typo.

    November 17, 2016 at 8:16 am #349510
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    Materiality is not simply a matter of saying, for example, that an item is 8% of a different benchmark

    There is also the important element of comparison

    If gross profit is 8% … is that good or bad?

    Who can tell until you’re told that last year the gross profit was 135

    Absolute values are fine, but the real strength of materiality calculations comes with comparison

    OK?

    November 17, 2016 at 11:54 am #349555
    numera
    Member
    • Topics: 30
    • Replies: 44
    • ☆☆

    ok got it thanks.

    November 17, 2016 at 1:30 pm #349581
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    You’re welcome

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