Here is the synopsis of our sample research paper on Planning Materiality. Have the paper e-mailed to you 24/7/365.
Essay / Research Paper Abstract
This 3 page paper looks at a case study supplied by the student and shows how to calculate the planning materiality, and how this is applied to the accounts when audited.
Page Count:
3 pages (~225 words per page)
File: TS14_TEplanmat.rtf
Buy This Term Paper »
Unformatted sample text from the term paper:
Then we can calculate the planning materiality fro the table given. The first stage is to look at the total assets and revenue to determine which figure is the highest
and as such, which figure should be used in the equation given, the total revenue is $20,742,000. The total assets are $29,611,000 meaning that the total assets are the figure
used. On the table this asset figure of 29 million falls in the band between 10 million and thirty million. This will then give us the equation from the
chart 85,500 +.(00461 x (29,611,000 - 10,000,000)) which is 85,500 +(.00461 x 19,611,000) = 175,906. Therefore using the table provided we can state that the planning materiality is
175,906. This is then used to set the level, which is calculated as a percentage of assets. Question 2 The planning materiality is a quantitative measure used to
assess what is seen as a material impact on the accounts. This is then allocated to the different groups, as stated here there will be a 100% allocation to most
transaction types. This quantitative measure indicates the level of tolerance before anything is seen as materially significant for the audited accounts. If we take the 175,906 as a percentage of
the total assets which are 29,611,000 we get the percentage of 0.6%. This appears to be a very low level of materiality,. However, when we look at the size
of the accounts with a fairly small level of assets then the lower percentage will also reflect the impact that smaller changes will have on the accounts making a material
difference. If we look at this is also fits in with the generally accepted levels where the planning materially will usually be in the region of .5 - 1%
...