ACC 546 Case 7.1 Anne Aylor, Inc.

[a] Why are different materiality bases considered when determining planning materiality?


[b] Why are different materiality thresholds relevant for different audit engagements?


[c] Why is the materiality base that results in the smallest threshold generally used for planning purposes?


D. Why is the risk of management fraud considered when determining performance materiality?


E. Why might an auditor not use the same performance materiality amount or percentage of account balance for all financial statement accounts?


F) Why does the combined total of individual account performance materiality commonly exceed the estimate of planning materiality?


G) Why might certain trial balance amounts be projected when considering planning materiality?


[2] Based on your review of the Exhibits (1 and 2) and audit memos (G-3 and G-4), complete audit schedules G-5, G-6 and G-7. 


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