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    Task 2

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    Shariful Hoque
    To determine the appropriate scope of audit procedures, the auditor must calculate materiality levels. The auditor reviewed ColAlta Pipeline's financial statements and applied generally accepted formulas to calculate a recommended materiality threshold of $20,830 for high risk and $41,660 for low risk based on 5-10% of net income. The calculation was prepared in October 2016 and reviewed.

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    Task 2

    Uploaded by

    Shariful Hoque
    913 views2 pages
    To determine the appropriate scope of audit procedures, the auditor must calculate materiality levels. The auditor reviewed ColAlta Pipeline's financial statements and applied generally accepted formulas to calculate a recommended materiality threshold of $20,830 for high risk and $41,660 for low risk based on 5-10% of net income. The calculation was prepared in October 2016 and reviewed.

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    calculation materiality

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    To determine the appropriate scope of audit procedures, the auditor must calculate materiality levels. The auditor reviewed ColAlta Pipeline's financial statements and applied generally accepted formulas to calculate a recommended materiality threshold of $20,830 for high risk and $41,660 for low risk based on 5-10% of net income. The calculation was prepared in October 2016 and reviewed.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    913 views2 pages

    Task 2

    Uploaded by

    Shariful Hoque
    To determine the appropriate scope of audit procedures, the auditor must calculate materiality levels. The auditor reviewed ColAlta Pipeline's financial statements and applied generally accepted formulas to calculate a recommended materiality threshold of $20,830 for high risk and $41,660 for low risk based on 5-10% of net income. The calculation was prepared in October 2016 and reviewed.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    Download as docx, pdf, or txt
    of 2

    Purpose: To determine the nature, timing and extent of audit procedure,

    materiality level is needed to calculate.


    Source documents for calculation: The following source documents consider for
    materiality level calculation:

    ColAlta Pipeline, Ltd financial statements;


    Using the general accepted materiality formulas provided.

    Materiality level calculation:


    Calculation of recommended materiality December 31, 2015
    Materiality Formula

    Net
    Income
    Total
    Assets
    Equity

    5% to 10% of Net
    Income
    % to 1% of Total
    Assets
    % to 5% of Equity

    High Level of Risk


    (thousands of Canadian
    dollars)
    $ 20,830

    Low Level of Risk


    (thousands of Canadian
    dollars)
    $ 41,660

    $6,873

    $13,746

    $2,176

    $21,762

    Overall recommended
    risk assessment:
    Recommended
    materiality threshold:

    WP Ref
    Prepared by:
    Reviewed by:
    Date prepared:

    A2-2
    Sharif
    Oct 15.2016

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