For example, the auditor can take the total estimates in sample/ divided by the same, times the population to get or = the direct projection estimate of misstatement. According to the AU-C, 320 paragraph A14 described the performance materiality by “Planning the audit solely to detect individual material misstatements overlooks the fact that the aggregate of individually immaterial misstatements may cause the financial statements to be materially misstated and leaves no margin for possible undetected misstatements.”[1] This means that the auditor should implement a performance materiality to reduce to an appropriately low level the probability of misstatements in that particular class of transactions or account balance. Yes, I do believe that the possible impairment of the investment in the sixth store is material to the Lakeside Company because the company only has a net worth of fewer than one million dollars. As described in the AU-C Section 320 paragraph 10 that if “…one or more particular classes of transaction, account balance or disclosures exist for which misstatements of lesser amounts than materiality for financial statements as a whole could reasonably be expected to influence the economic decisions of the users…” [1] As explained in the quote, users of the
For example, the auditor can take the total estimates in sample/ divided by the same, times the population to get or = the direct projection estimate of misstatement. According to the AU-C, 320 paragraph A14 described the performance materiality by “Planning the audit solely to detect individual material misstatements overlooks the fact that the aggregate of individually immaterial misstatements may cause the financial statements to be materially misstated and leaves no margin for possible undetected misstatements.”[1] This means that the auditor should implement a performance materiality to reduce to an appropriately low level the probability of misstatements in that particular class of transactions or account balance. Yes, I do believe that the possible impairment of the investment in the sixth store is material to the Lakeside Company because the company only has a net worth of fewer than one million dollars. As described in the AU-C Section 320 paragraph 10 that if “…one or more particular classes of transaction, account balance or disclosures exist for which misstatements of lesser amounts than materiality for financial statements as a whole could reasonably be expected to influence the economic decisions of the users…” [1] As explained in the quote, users of the