I just dont want the answer , I want an explanation to the answer, the answer i KNow is B but why ?
JJ is a retailer, public for profit company, with net income before taxes of $2,000,000 and...
JJ is a public for profit company with net income before taxes of $1,000,000 and total assets of $5,000,000. During the year, Wayne CPA firm discovered misstatement in the following accounts. Inventory was misstated by $27,000; Accounts Receivable was misstated by $20,000, and PPE was misstated by $2,000. Which accounts if any need to be adjusted? Calculate Overall Materiality using 5% of the appropriate base and calculate Tolerable Misstatement by using 50% of the appropriate base. Inventory should be adjusted...
Ringer. CPA, has been engaged to audit Tech Co., a publicly traded company. In planning the audit, Ringer uses 3% of income before taxes as an overall materiality threshold and 50% of overall materiality as the tolerable misstatement. If, as a result of substantive testing. Tech Co.'s pretax earnings of $20 million are found to be overstated by 4% due to errors in revenue recognition, Ringer would likely take all of the following actions when evaluating the audit findings, except...
1. Consider the following statements: I. Clearly trivial and not material are terms that can be used interchangeably. II. The higher the dollar amount of (performance) materiality the less audit evidence is required. a. I is true; II is true b. I is true; II is false c. I is false; II is true d. I is false; II is false 2. Consider the following statements: I. Per auditing standards, the successor [new]...