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In answer ( a )Calculation of preliminary materiality answer from BPP revision kit
2008 2007
( draft ) ( actual )
$ $
Revenue
.5% 808,000 722,000
1% 1,615,000 1,444,000Profit before Tax
5 % 95,000 N/A
10% 190,000 N/ATotal Assets
1% 1038,000 1060,000
2% 2,076,000 2,120,000Based on the above figure ,a suitable range for preliminary materiality would be in the range of $ 1.0 – 1.5 m
I want to know how this $ 1.0 – 1.5 m has came as the suitable range for preliminary materiality
Hi Arun
Does the BPP answer not give you any idea? It’s a difficult question for me to answer without the question in front of me and the ACCA website doesn’t have exams from before December 2007
sir please try by looking to BPP revision kit regarding Yates
and my next question is but not related to Yates,it is from text book ,I would like to know some example of corresponding figure and comparative financial information ,I read all the definition of ISA 710 but some example would help me to better understand about it
Corresponding figures are last year’s figures that “are intended to be read only in relation to the amounts and other disclosures relating to the current period” So if Receivables this year are $2.3m and last year’s Receivables were $2.4m, that $2.4m is the corresponding figure and is shown as a parallel set of financial statements on the face of this year’s financial statements. They ARE NOT referred to in this year’s audit report
Comparative financial statements are comparative information where amounts and other disclosures for the prior period are included for comparison with the financial statements of the current period but, if audited, ARE referred to in the auditor’s opinion on this year’s financial statements
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