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At what level would you assess the risk of material

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Question - Performing an Analytical Procedure Using Client Estimates. Your client has provided you with the following information which they have calculated based on the underlying accounting information.

Season ticket sales (excluding Champion's Club) 28.630

Champions Club seats sold 3,404

Student tickets provided, per game 16,000

Average number of complimentary tickets provided 1,400

Average season ticket price $300

Required - For the purposes of performing the following procedure, you may assume that you have tested the underlying transaction-level date produced by the entity (IPE) and it is sufficiently reliable. Assume that performance materiality has been set at $230,000 for the purpose of this analytical procedure. Prepare and appropriately document an estimate of football ticket revenue using only the summary estimates provided above by the client, as well as the client's summarized single game total tickets issued summary. Use this calculation to test the reported sales revenue of $26,726,864 and answer the following questions:

a. What is your best estimate of 2018 football ticket revenue using the client's average ticket sales and prices provided in the case? Do not use the actual data for this calculation.

b. Based on the performance of materiality set, does 2018 football ticket revenue appear to be fairly stated? Why or why not?

c. At what level would you assess the risk of material misstatement related to 2018 football ticket revenue after the performance of your analytical procedure (low, moderate, high)?

d. What additional procedures would you recommend performing related to your audit of football ticket revenue?

Reference no: EM132979496

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