Week 2 - Materiality Levels - Quantitative

Question 1

For revenue, typically related to a % of

Answer 1

0.5% - 1%

Question 2

For profit before tax, typically related to a % of

Answer 2

5% - 10%

Question 3

For gross assets, typically related to a % of

Answer 3

1% - 2%

Question 4

Individual large amounts are more likely to be…

Answer 4

Material

Question 5

However, what can also be material?

Answer 5

Aggregate of small (immaterial) misstatements can be material

Question 6

Determine ‘performance materiality’ i.e…

Answer 6

Less than set materiality level but appropriate for a particular class of transaction, account balance or disclosure