How view of preliminary materiality would be altered

Assignment Help Financial Accounting
Reference no: EM132964586

Structural is a manufacturer that sells mainly to the infrastructure construction industry. The national economy is currently static with consumer confidence falling in the last two quarters. The company has an internal audit function that in previous years you have assessed as effective. Your experience with the company in past years has also shown that its forecasts are generally reliable.

Required:

Problem a) Given the information provided, suggest an appropriate benchmark as the starting point for determining preliminary materiality for Structural. Provide reasons for your answer.

Problem b) List the factors you would consider in determining preliminary materiality for the audit for the period ended 30 June 2018, and explain how those factors affect your assessment of materiality.

Problem c) Describe how your view of preliminary materiality would be altered if you discovered that during the year Structural had refinanced its debt with a contractual commitment that requires its debt to equity ratio to be better than 1:1 at all times

Reference no: EM132964586

Questions Cloud

Compute the adjusted balances of the partners respective : The partnership earned profit of P120,000 in 2011. Compute for the adjusted balances of the partners' respective capital accounts on December 31, 20x1
What is the compensation before remuneration and evaluation : The head manager got P280,000 for the current year as remuneration. What is the compensation before remuneration and evaluation
Find what should be minimum amount of profit contribution : The manufacturer is considering making beds. What should be the minimum amount of profit contribution per bed for it to be a viable product? Explain.
What amount should Metro report as inventory on January : Metro Company which maintains a perpetual inventory system, Under the moving average method, what amount should Metro report as inventory on January 31
How view of preliminary materiality would be altered : How view of preliminary materiality would be altered if you discovered that during the year Structural had refinanced its debt with a contractual commitment
What strategic market research for technology requirements : What Strategic market research for technology requirements should be? Broadly focused so both public and private sector activities are included in the research
What are the equivalent units for direct materials : What are the equivalent units for direct materials and conversion costs? Then, what is the cost per equivalent unit for direct materials and conversion costs?
Explain five qualities of spiritual health : Define spirituality and what it means to you. Explain five qualities of spiritual health.
What is the contribution margin per cake : Uncle TT sells cheese cakes. Selling price of each cheese cake is $10 and variable costs of $4. Total fixed costs for Uncle TT are $9,000.

Reviews

Write a Review

Financial Accounting Questions & Answers

  What are capital gains on the investment

The stock paid a dividend of $1.63 per share and the stock price at the end of the year is $54.12. What are capital gains on the investment?

  Would need to work out the pv

Would we need to work out the PV , if there's no interest charged? The supplier elected not to charge interest. At would cost would we recognise the equipment?

  What has been done to strengthen the audit function

What has been done to strengthen the audit function since the cases occurred and what has not been (or cannot be) done to reduce the likelihood

  Prepare the journal entries to capture the swap contract

A New Zealand company has a foreign denominated asset in United States dollars worth US$600,000 on the 1 July 2016. The US debtor is due to repay this debt to the New Zealand company over the next 12 months. Prepare the journal entries to capture the..

  Develop a cash budget for his latest venture

To avoid any uncertainty regarding his business' financing needs at the time when such needs may arise, Cyrus Brown wants to develop a cash budget for his lates

  Make the company selling and administrative expense budget

Make the company's selling and administrative expense budget for the upcoming fiscal year. (Round "Per Unit" answers to 2 decimal pieces.)

  Explain the goals of an experience rating program

All workers' compensation agencies have Experience Rating programs. Explain the main purpose and goals of an Experience Rating Program

  Prepare adjusting entries in the general journal

Prepare adjusting entries in the General Journal. Assume that the equipment purchased on October 1 has no trade-in value and an expected life of 5 years. Prepare the adjusting entry for the month of October. Prepare the adjusting entry for the insura..

  Show all consolidation adjustment entries

Show all consolidation adjustment entries needed to eliminate the above intra- group transactions for financial year ended 30 June 2017

  What is the net present value of this investment

The cost of the advertising campaign would be $43,000. Assuming a discount rate of 5%, what is the net present value of this investment

  Find and calculate the eac

If the business has a cost of capital of 12 percent, Calculate the EAC. You are trying to pick the least expensive car for your delivery service.

  Calculate the conventional and modified benefit cost ratios

Calculate the conventional and modified benefit cost ratios for the following project.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd