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PBIT materiality is between 5%-10%
what if when calculating materiality for an item and found that the percentage is 13% of PBIT
the matter is material or pervasive?
5% to 10% of PBIT
0.5% to 1% of Revenue
1% to 2 % of Gross asset
These are benchmarks to find only materiality not pervasiveness.5% to 10% of PBIT
0.5% to 1% of Revenue
1% to 2 % of Gross asset
These are benchmarks to find only materiality not pervasiveness.
And in easy word if the misstatement effect the whole Financial Statement then it will be pervasive.
I think I am right. Any other suggestions from someone else?This Matter is material. Pervasiveness is when a misstatement renders the FS invaluable, that would call for an adverse opinion, % usually above 50
Whoa!!!! 50%!!! who on this Earth has told you that?
The whole question comes down to a matter of subjectivity. If, in the mind of the reporting partner, the error is of such significance as to make the financial statements misleading (or meaningless) then that’s a measure of pervasiveness
I cannot imagine an error of 50% NOT being pervasive. But equally I CAN imagine an error of less than 50% being pervasive – and it need not even be quantitatively material – it could be qualitatively material / pervasive
So stick that up your 50% and smoke it!
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