Reference no: EM133021597

Question - You are auditing football ticket revenue for 2020 Central University (CU) football season. Here are the facts:

For the 2020 football season, unaudited ticket revenues are reported as $27,000,000.

For the 2019 football season,

Total ticket revenues were $18,900,000.

Ticket prices were $54 per ticket.

There were 5 home games, 4 of which were in-conference games with average attendance of 75,000, and 1 of which was a non-conference game against a smaller school with attendance of 50,000.

CU's stadium has a capacity of 88,300.

Your supervisor believes the 2020 amount must be overstated due to the large increase and he asks you to audit ticket revenues. Materiality is set at $500,000. Because detailed tests of ticket sales would be too expensive, you decide to perform analytical procedures on the 2020 unaudited ticket revenue as a substantive procedure. You gather more information:

During the 2020 season, CU had 7 home games: 2 non-conference against smaller schools, 4 in-conference games, and a final game against a rival that always sells out.

For the substantive procedure, you estimate that attendance will be similar to comparable games from 2019.

Ticket prices increased to $57 for the 2020 season.

Required -

a. Estimate 2020 football season ticket revenue for CU.

b. Based on your estimate, is the difference material, causing you to suggest further procedures? Why or why not? (In other words, what are you basing your answer on? You DO NOT have to suggest further procedures.)