Accounting 440, Spring, 2019  Class Project  Name: ____________________                          Student ID __________________  Overview:  This project will be developed throughout the course of the class and will include different items from  the audit process as time permits. You will accumulate the parts listed below (additional parts will be  added as the class proceeds) and turn in a comprehensive portfolio of work on the last day of class with  this  project  sheet  as  the  cover  page.  When  the  assignments  require  names  and  other  specific  information use the Organization as the auditee name and Firm 440 as the auditor name. Since the class  is trying to incorporate more information than any one organization needs to consider, different pieces  will be taken from various organizations. Keep in mind that this is a fluid project and precise answers are  not  necessarily  the  point.  Demonstration  of  a  general  understanding  of  the  audit  process  and  documentation of an effort to learn will be considered for the grade. The project grading criteria will be  based on the concept of a reasonable effort and appropriate documentation of that effort.  Part 1:  Using  the  Example  Engagement  letter  on  Blackboard  (Word  document)  modify  the  letter  to  fit  the  situation for University Enterprises Corporation of CSUSB the latest financial statements are online at  http://uec.csusb.edu/documents/UniversityEnterprisesCorpFS.pdf.  Be  aware  there  are  two  audit  reports because there is a single audit (see page 43). The information from both reports will need to be  captured in the engagement letter. We can discuss further in class.  Part 2:  Using  the  example  materiality  calculation  sheet  discussed  in  class,  determine  materiality  using  the  following assumptions.   User tolerance for misstatement is high.   Performance materiality is 60% of overall planning materiality.  Part 3:  Using the example audit program discussed in class (available on blackboard), use the information below  to complete the highlighted steps in the program (print the program and fill it in manually). In the work  paper reference column describe what you did (or would do based on the below analysis). Sign off all  completed steps.  Deletions from CIP consist of office equipment for $53,108 and the first part of a capital improvement  project of $2,000. The remaining asset additions are for a truck purchased for $52,983. The leasehold  improvements consist of three AC units (two for $13,000 and one for $4,338). Considering materiality,  explain  your  test  strategy  for  each  asset  addition  category.  The  capitalization  policy  is  to  capitalize  additions over $10,000.  UEC Fixed Assets 2017 Additions Deletions 2018 Land 4,640                 ‐               ‐             4,640                 CIP 63,262               ‐               55,108      8,154                 Buildings 3.

1. Accounting 440, Spring, 2019
Class Project
Name: ____________________ Student ID ___
_______________
Overview:
This project will be developed throughout the course of the clas
s and will include different items from
the audit process as time permits. You will accumulate the parts
listed below (additional parts will be
added as the class proceeds) and turn in a comprehensive portfo
lio of work on the last day of class with
this project sheet as the cover page. When the
assignments require names and other specific
information use the Organization as the auditee name and Firm
440 as the auditor name. Since the class
is trying to incorporate more information than any one organizat
ion needs to consider, different pieces
will be taken from various organizations. Keep in mind that this
is a fluid project and precise answers are
not necessarily the point. Demonstration of a general
understanding of the audit process and

2. documentation of an effort to learn will be considered for the gr
ade. The project grading criteria will be
based on the concept of a reasonable effort and appropriate doc
umentation of that effort.
Part 1:
Using the Example Engagement letter on Blackboard
(Word document) modify the letter to fit the
situation for University Enterprises Corporation of CSUSB the l
atest financial statements are online at
http://uec.csusb.edu/documents/UniversityEnterprisesCorpFS.pd
f. Be aware there are two audit
reports because there is a single audit (see page 43). The inform
ation from both reports will need to be
captured in the engagement letter. We can discuss further in cla
ss.
Part 2:
Using the example materiality calculation sheet discussed
in class, determine materiality using the
following assumptions.
tolerance for misstatement is high.

3. Performance materiality is 60% of overall planning materiality.
Part 3:
Using the example audit program discussed in class (available o
n blackboard), use the information below
to complete the highlighted steps in the program (print the progr
am and fill it in manually). In the work
paper reference column describe what you did (or would do base
d on the below analysis). Sign off all
completed steps.
Deletions from CIP consist of office equipment for $53,108 and
the first part of a capital improvement
project of $2,000. The remaining asset additions are for a truck
purchased for $52,983. The leasehold
improvements consist of three AC units (two for $13,000 and on
e for $4,338). Considering materiality,
explain your test strategy for each asset addition
category. The capitalization policy is to capitalize
additions over $10,000.
UEC Fixed Assets

4. 2017 Additions Deletions 2018
Land 4,640 ‐ ‐ 4,640
CIP 63,262 ‐ 55,108 8,154
Buildings 3,936,573 ‐ ‐ 3,936,573
Equipment, Furniture 3,027,836 108,091
3,135,927
Lease Hold improvements 639,321 30,338
469,659
intangible assets 189,057 189,057
7,860,689.00 138,429 55,108 7,744,010.00
Part 4:
Perform an analytic analysis of revenues and expenditures (com
plete the part 4 spreadsheet available
on blackboard). Your expectation is that an account will not var
y by more than the applicable materiality
(calculated in part 2 above) difference and 10%. For any varianc
e that exceeds your expectation, prepare
an inquiry email (prepare in Word or write below) requesting an
explanation for the variance from the
client.

5. Part 5:
Presume that there are significant challenges with valuing the sp
lit interest agreements. Management
has not attempted to adjust their value and is stating them at the
historical recorded value. Since this is
not consistent with GAAP, you have determined that you cannot
give an unmodified opinion on the
financial statements. Modify the report (use the Word report ava
ilable on blackboard) issued to include
a modified opinion addressing the situation.
FIRM NAME
Certified Public Accountants
DATE
This will confirm our understanding of the arrangements for our
audit of the financial statements of COMPANY NAME, for the
year ending BALANCE SHEET DATE.
We will audit the Company's balance sheet as of BALANCE
SHEET DATE, and the related statements of income, retained
earnings, and especially cash flows for the year then ended, for
the purpose of expressing an opinion on them. The financial
statements are the responsibility of the Company management.
Our responsibility is to express an opinion on the financial
statements based on our audit.
We will conduct our audit in accordance with generally

6. accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audit will provide a
reasonable basis for our opinion.
Our procedures will include tests of documentary evidence
supporting the transactions recorded in the accounts, and direct
confirmation of receivables and certain other assets and
liabilities by correspondence with selected customers, creditors,
legal counsel, and banks. At the conclusion of our audit, we
will request certain written representations from you about the
financial statements and matters related thereto.
Although the audit is designed to provide reasonable assurance
of detecting errors and irregularities that are material to the
financial statements, it is not designed and cannot be relied
upon to disclose all fraud, defalcations, or other irregularities.
However, we will inform you of any material errors, and all
irregularities or illegal acts, unless they are clearly
inconsequential, that come to our attention.
If you intend to publish or otherwise reproduce the financial
statements and make reference to our firm, you agree to provide
us with printers' proofs or masters for our review and approval
before printing. You also agree to provide us with a copy of the
final reproduced material for our approval before it is
distributed.
As part of our engagement for the year ending BALANCE
SHEET DATE, we will review the federal and state income tax
returns for COMPANY NAME.
Further, we will be available during the year to consult with you
on the tax effects of any proposed transactions or contemplated
changes in business policies.

7. Assistance to be supplied by your personnel, including the
preparation of schedules and analyses of accounts, is described
in a separate attachment. Timely completion of this work will
facilitate the completion of our audit.
Our fees will be billed as work progresses and are based on the
amount of time required plus out-of-pocket expenses. Invoices
are payable upon presentation. We will notify you immediately
of any circumstances we encounter that could significantly
affect our initial estimate of total fees, which will range from
$XX,XXX to $XX,XXX.
The working papers for this engagement are the property of
NAME OF AUDITOR and constitute confidential information.
However, we may be requested to make certain working papers
available to NAME OF REGULATOR pursuant to authority
given to it by law or regulation. If requested, access to such
working papers will be provided under the supervision of
NAME OF AUDITOR personnel. Furthermore, upon request,
we may provide photocopies of selected working papers to
NAME OF REGULATOR. The NAME OF REGULATOR may
intend, or decide, to distribute the photocopies or information
contained therein to others, including governmental agencies.
If this letter correctly expresses your understanding, please sign
the enclosed copy where indicated and return it to us.
We appreciate the opportunity to serve you and trust that our
association will be a long and pleasant one.
Sincerely,
FIRM NAME
______________________________
[Engagement Partner's Signature]
Accepted and agreed to:
______________________________
[Client Representative's Signature]
______________________________

8. [Title]
______________________________
[Date]
ROGERS. ANDERSON, MALODY & SCOTT. LLP
CERTIFIF[) PUBL1C ACCO,JNT;NTS. SINC:F I J.lfl
To the Board of Directors of
San Bernardino, California
i
INDEPENDENT AUDITOR'S REPORT
Report on the Financial Statements
We have audited the accompanying financial statements of
University Enterprises Corporation at CSUSB (UEC) (a
nonprofit organization), which comprise the statement of
financial position as of June 30, 2017, and the related statement

9. of activities, statement of expenses by natural classification,
and statement of cash flows for the year then ended, and the
related notes to the financial statements.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair
presentation of these financial statements in accordance with
accounting principles generally accepted in the United States of
America; this includes the design, implementation, and
maintenance of internal control relevant to the preparation and
fair presentation of financial statements that are free from
material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in
accordance with auditing standards generally accepted in the
United States of America and the standards applicable to
financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free from material misstatement.
An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor's
judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud
or error. In making those risk assessments, the auditor considers
internal control relevant to the entity's preparation and fair
presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the

10. entity's internal control. Accordingly, we express no such
opinion. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well
as evaluating the overall presentation of the financial
statements.
-2-
STABI LITY. ACCU RACY. TRUST
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of
UEC as of June 30, 2017, and the changes in its net assets and
its cash flows for the year then ended in accordance with
accounting principles generally accepted in the United States of
America.
Report on Summarized Comparative Information
We have previously audited the UEC’s 2016 financial
statements, and we expressed an unmodified audit opinion on
those audited financial statements in our report dated September
19, 2016. In our opinion, the summarized comparative
information presented herein as of and for the year ended June
30, 2016, is consistent, in all material respects, with the audited
financial statements from which it has been derived.
Other Matters
Other Information

11. Our audit was conducted for the purpose of forming an opinion
on the financial statements as a whole. The accompanying
schedule of expenditures of federal awards, as required by Title
2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform
Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards, and supplementary
information are presented for additional analysis and are not a
required part of the basic financial statements. Such information
is the responsibility of management and was derived from and
relates directly to the underlying accounting and other records
used to prepare the financial statements. The information has
been subjected to the auditing procedures applied in the audit of
the financial statements and certain additional procedures,
including comparing and reconciling such information directly
to the underlying accounting and other records used to prepare
the financial statements or to the financial statements
themselves, and other additional procedures in accordance with
auditing standards generally accepted in the United States of
America. In our opinion, the information is fairly stated, in all
material respects, in relation to the financial statements as a
whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have
also issued our report dated September 18, 2017, on our
consideration of UEC’s internal control over financial reporting
and on our tests of its compliance with certain provisions of
laws, regulations, contracts, and grant agreements and other
matters. The purpose of that report is to describe the scope of
our testing of internal control over financial reporting and
compliance and the results of that testing, and not to provide an
opinion on internal control over financial reporting or on
compliance. That report is an integral part of an audit performed
in accordance with Government Auditing Standards in
considering UEC’s internal control over financial reporting and

12. compliance.
San Bernardino, California September 18, 2017
-3-
Sheet3Class Project Part 4Revenues20162017$ Change%
ChangeCommissions776,280867,129Grants and
contracts27,260,90225,390,271Special
programs651,655608,938Parent fees217,122182,893Investment
income226,748232,423Gain/Loss on investments(4,336)-
0Unrealized gain(loss)92,684(136,600)Realized
gain(loss)(11,159)(5,688)Change in split int. 59,524Misc
Income310,325170,286Contract
settlements108,007104,228Total
reveue29,628,22827,473,404ExpensesGrants and
contracts27,264,01225,840,882Misc support
services887,950851,418Management and
general769,5311,314,572Total expenses28,921,49328,006,872
Form AP 35
Index Reference__________

13. Audit Program for Fixed Assets
Legal Company Name Client:
Balance Sheet Date:
Instructions: The auditor should refer to the audit planning
documentation to gain
an understanding of the financial reporting system and the
planned extent of testing
for fixed assets. Modification to the auditing procedures listed
below may be necessary
in order to achieve the audit objectives.
All audit work should be documented in attached working
papers, with appropriate
references noted in the right column below.
Audit Objectives Financial Statement
Assertions
Property and equipment reflected in the balance sheet
physically exist and the entity has legal title or similar
rights of ownership to them.
Existence or occurrence
Rights and obligations

14. Property and equipment include those that are
purchased, contributed, constructed in-house or by
third parties, and leases meeting the criteria for finance
leases.
Completeness
Property and equipment additions are recorded
correctly as to account, amount, and period. Capital
items are identified and distinguished from repairs and
maintenance expense items.
Existence or occurrence
Completeness
Rights and obligations
Retirements, trade-ins, and idle property and
equipment are promptly identified and recorded
correctly as to account, amount, and period.
Existence or occurrence
Completeness
Rights and obligations
Depreciation calculations are made and allocated using
proper estimated useful lives and methods.
Valuation or allocation
Property and equipment that are idle or held for resale
are identified and classified separately from property
and equipment currently used in operations. The net
carrying value of property and equipment is expected
to be recoverable in the ordinary course of business.

15. Valuation or allocation
Presentation and disclosure
Property and equipment and related depreciation are
appropriately presented in the financial statements and
adequate disclosures made of (1) the basis of
valuation, (2) major classes of property and
equipment, (3) depreciation methods, (4) amounts of
capitalized leases, (5) capitalized interest, and (6)
property and equipment that are pledged or subject to
liens.
Presentation and disclosure
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1. Obtain an understanding of the client’s policies and
procedures with respect to capitalization and depreciation
methods used.
2. Prepare or obtain from the client a summary of fixed
assets and related depreciation showing the following
information:

16. a. Classification of major classes of property such as
land, buildings, furniture and fixtures, machinery and
equipment, leasehold improvements, construction in
progress, and leased property under capital leases
b. Asset balances at the beginning of the year
c. Asset additions during the year
d. Retirements and disposals during the year
e. Other changes during the year (e.g., transfers,
reclassifications)
f. Asset balances at the end of the year
g. Depreciation methods and estimated depreciable lives
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h. Accumulated depreciation balance at the beginning of
the year
i. Current-year additions to accumulated depreciation
accounts
j. Current-year reductions of the accumulated
depreciation accounts
k. Other current-year changes to the accumulated

18. depreciation accounts, (e.g., transfers,
reclassifications)
l. Accumulated depreciation balance at the end of the
year
3. Trace balances at the beginning of the year for asset
balances and accumulated depreciation balances per the
summary schedule of property and equipment in Step 2
above to ending balances per the prior years’ working
papers.
4. Obtain from the client or prepare a listing of all property
additions for the current period in support of the asset
additions balance in Step 2c above, showing (a)
description of the asset, (b) whether the item is new or
used, (c) date the asset was acquired or placed in service,
(d) cost of the asset, (e) estimated depreciable useful life,
and (f) reference number such as vendor invoice date,
check number, purchase contract, etc., and perform the
following procedures for selected asset additions:
a. Determine if the assets capitalized are in accordance
with the entity’s capitalization policy.

19. b. Determine if the acquisition was properly authorized
by reference to the minutes of meetings of the
Representative Governing Board, capital expenditures
budget, or other sources.
c. Substantiate the asset’s cost by examining supporting
documentation such as vendor invoices, purchase
contracts, work orders and job status reports (for
construction in progress), deeds (for real property), or
certificates of ownership.
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20. Workpaper
Reference
d. For significant property acquisitions, consider
inspecting the asset.
e. For property additions that represent revaluations of
fixed assets, determine whether (1) the revaluation was
made in accordance with the decision of the
government and (2) the calculations were made in
accordance with IAS 16.
f. If interest on borrowed funds is capitalized and
included in the carrying value of fixed assets, as
allowed by IAS 23, perform the following:
• Recompute the amount of interest capitalized.
• Determine whether the amount of interest
capitalized is limited to the portion of total interest
incurred that could have been avoided if the asset
had not been acquired.
5. Prepare or obtain from the client a listing of all property
retirements and disposals for the year in support of the
total balance in Step 2d above, showing (a) description of
the asset retired or disposed of, (b) date sold or disposed
of, (c) date the asset was initially acquired, (d) asset cost,

21. (e) accumulated depreciation, (f) net carrying amount, (g)
cash or consideration received, (h) net gain or loss. Select
asset disposals for testing and perform the following
procedures:
a. Determine if the disposition of the asset was properly
authorized by reference to such sources as minutes of
meetings of the Representative Governing Board.
b. Inquire if any of the sales of the fixed assets were in
connection with sale/leaseback transactions. If yes,
determine the proper accounting treatment.
c. Determine if depreciation was calculated correctly
through the date of disposal.
d. Trace the asset cost and the acquisition date to the
prior-period workpapers or property records.

22. Performed
By
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e. Substantiate cash or consideration received by
examining remittance advices, bank deposit tickets,
bills of sale, notes executed, etc.
f. Recompute gain or loss on disposal and agree the
amount to the expense/revenue account.
g. Scan revenue accounts for significant proceeds from
the sale of assets.
6. Review and test depreciation calculations as follows:
a. Review depreciation methods and depreciable lives
used and determine if they are in accordance with IAS
and consistently used. Ask the client about any
changes in methods and procedures since the prior
period.
b. Perform analytical procedures of provision for

23. depreciation for the current period by comparing it to
the prior period, taking into consideration estimated
useful lives. If material, recompute depreciation
expense for individually significant items on a test
basis.
c. Scan the detailed asset listing to determine if the
useful lives are reasonable, and if depreciation
methods are in accordance with IAS.
d. Reconcile provision for depreciation as shown in the
summary of property and equipment in Item 2 above
to the general ledger.
7. If repairs and maintenance expense account balances are
material, scan the general ledger activity and examine
supporting documentation on a test basis to determine
whether the amounts should have been capitalized.
8. Obtain from the client, or prepare, a summary of all leases
in force, and perform the following procedures to
determine if the leases should be capitalized based on
criteria in IAS 17:

24. a. Examine new lease agreements and amendments to
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existing leases and determine whether they are
properly accounted for in accordance with IAS 17
(i.e., finance leases, operating leases, etc.), giving
adequate consideration to the following:
(1) Review the reasonableness of the interest rate used
to discount the lease obligation.
(2) Determine whether the client properly considered
noncapitalizable costs, such as taxes, insurance,
and maintenance in computing the amount of lease
cost capitalized.

25. (3) Review the reasonableness of the method and
period for amortization of capitalized leases.
(4) Test lease payments.
(5) Test the computations of current maturities.
b. Consider obtaining confirmations from the lessor of
pertinent details of significant lease agreements,
including compliance with restrictive covenants.
9. Using information obtained in the above procedures and
based on inquiry of the client, ascertain the following:
a. Whether assets that are fully depreciated remain in
service or have been retired from service.
b. Whether the net carrying values of property and

26. equipment are recoverable in the ordinary course of
business, and whether the remaining useful lives of the
assets are reasonable.
c. Whether property and equipment is idle or held for
sale and, if so, whether such assets are identified and
classified separately from property and equipment
currently used in operations.
d. Whether any property and equipment is pledged or
subject to liens or encumbrances.
Performed
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e. Whether property and equipment and related
depreciation are appropriately presented in the
financial statements with adequate disclosures.

27. 10. Perform the following analytical procedures for property
and equipment and investigate any significant fluctuations
or deviations from the expected balances:
a. Compare the current year’s account balances with the
prior year’s account balances.
b. Compare the details of actual capital expenditures with
the capital budget.
11. Evaluate whether any events or changes in circumstances
have occurred indicating that the carrying amount of
assets may not be recoverable and whether an impairment
loss should be recognized in accordance with IAS 36,
Impairment of Assets.:
a. Consider the existence of conditions such as the
following which may indicate that an asset has been
impaired:
(1) A significant decrease in the market value of the
asset, particularly in the case of assets held for sale

28. or expected to be sold in the near future.
(2) A significant change in the extent or manner in
which an asset is used or a physical change in an
asset, such as a significant decline in the use of
certain machinery and equipment or physical
damage to an asset.
(3) A significant adverse change in legal factors or in
the business climate that could affect the value of
an asset or an adverse action or assessment by a
regulator.
(4) An accumulation of costs significantly in excess of
the amount originally expected to acquire or
construct an asset.
(5) A current period operating or cash flow loss
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29. Workpaper
Reference
combined with a history of operating or cash flow
losses.
(6) A projection or forecast that demonstrates
continuing losses associated with an asset used for
the purpose of producing revenue.
b. Determine if an impairment loss should be recognized
(an impairment loss should be recognized if the
carrying amount of an asset exceeds estimated future
cash flows undiscounted and without interest charges).
c. If an impairment loss should be recognized, test the
calculation of the loss as follows:
(1) Determine that the impairment loss is measured as
the amount by which the carrying amount of the
asset exceeds its fair value.

30. (2) Test the fair value by vouching to quoted market
prices, if available, or by reviewing the valuation
techniques used by management.
(3) If the fair value is based on the present value of
estimated future cash flows, test for mathematical
accuracy and ensure that the assumptions used in
the present value calculation are reasonable.
12. If the auditor is concerned about the risk of fraud, audit
procedures such as the following should be considered in
addition to the ones listed above:
a. Physically inspect significant assets and major
additions, and agree serial numbers with invoices or
other supporting documents.
b. Carefully scrutinize appraisals and engineering reports
that seem out of line with reasonable expectations, and
challenge the underlying assumptions.

31. c. When vouching fixed asset additions, accept only
original invoices, purchase orders, receiving reports,
or similar supporting documentation.
Performed
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d. Confirm selected fixed asset additions directly with
the vendor.
e. Review journal entries made to property accounts.
f. For self-constructed assets, examine supporting
documents for labor, materials, capitalized interest,
and other direct and indirect costs included in the
capitalized asset.
g. Perform extensive depreciation calculations.

32. h. Examine miscellaneous cash receipts records and other
income accounts for evidence of proceeds from fixed
asset disposals.
Based on the procedures performed and the results obtained, it
is my opinion that the
objectives listed in this audit program have been achieved.
Performed by Date
Reviewed and approved by
Date
Conclusions:
Comments:
Form AP 35Index Reference__________Audit
ObjectivesFinancial Statement AssertionsProperty and
equipment reflected in the balance sheet physically exist and the

33. entity has legal title or similar rights of ownership to
them.Rights and obligationsProperty and equipment include
those that are purchased, contributed, constructed in-house or
by third parties, and leases meeting the criteria for finance
leases.Property and equipment additions are recorded correctly
as to account, amount, and period. Capital items are identified
and distinguished from repairs and maintenance expense
items.Retirements, trade-ins, and idle property and equipment
are promptly identified and recorded correctly as to account,
amount, and period.Depreciation calculations are made and
allocated using proper estimated useful lives and
methods.Property and equipment that are idle or held for resale
are identified and classified separately from property and
equipment currently used in operations. The net carrying value
of property and equipment is expected to be recoverable in the
ordinary courProperty and equipment and related depreciation
are appropriately presented in the financial statements and
adequate disclosures made of (1) the basis of valuation, (2)
major classes of property and equipment, (3) depreciation
methods, (4) amount
Sheet1Materiality ExampleSelected
BanchmarkOperationsRevenue29,628,228Total Assets- 0Overall
Materiality (planning)444,423<< Total allowable
misstatementFactor Selected1.5%Performance Materiality (75%
Overall)333,318<< FS Line ItemAccount Level Materiality
(25% Performance)83,329<< Account balanceIndividually
Significant Items (33% Account Level)27,499<< e.g.
invoiceTrivial (1% Performance)3,333<< Pass at workpaper
level