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QUESTION 1 (12 MARKS) You are the auditor of Pezula Golf club. The golf club...

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Accounting

image QUESTION 1 (12 MARKS) You are the auditor of Pezula Golf club. The golf club is situated on the Pezula Estate in Mat North. The year end of the golf club is 28 February 2012. The golf club has about 250 members who pay yearly membership fees, for the privilege of playing golf at special rates on the Pezula golf course. The member fees are calculated with reference to the club's budgeted operating expenses for the following year. The purpose of the golf club is not to make a profit. The golf clubs' assets consist mainly of golf cars that are leased to players. Key financial information for the Pezula Golf club for the year ending 28 February 2012 is: It is your audit firm's policy to use the BD6 guideline in order to calculate materiality. You initially estimated the overall audit risk as Low for the audit of Pezula golf course for the year ending 28 February 2012. REQUIRED: 1.1 State the stages of the audit process where the auditor will make use of materiality, as well as the goal thereof during each stage. (4) 1.2 Calculate the materiality figure for Pezula Golf club - explain completely the approach you following calculating the figure. (8)

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