You are auditing Jennings Corporation and their pre-tax income is $25,000,000. The general guidelines for...
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You are auditing Jennings Corporation and their pre-tax income is $25,000,000. The general guidelines for determining materiality used by your CPA firm are: Planning materiality: 5% of pre-tax income Tolerable misstatement: 30% of planning materiality During the audit the following misstatements are discovered: Inventory : #320,000 Accounts Receivables: $295,000 Fixed assets: $330,000
Revenue: $365,000 Required: Determine Planning materiality:
Determine Tolerable misstatement:
Evaluate your audit findings and state your conclusion and/or recommendation
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