An audit firm performed interim procedures and determined interim materiality based on annualized pre-tax income from the first 9 months of the fiscal year is likely this small of a change ($28K for a client with $360M in revenue is small potatoes) will not require us to re-do any audit procedures. Note: if materiality increases, we would not need to do any additional procedures because we would have over-tested which is not a significant audit risk. We are much more concerned with under-testing.

Balance Sheets January 31 Liabilities and Shareholders' Equity Current liabilities Current portion of long-term debt Notes payable Accounts payable Accrued liabilities Income taxes payable Total current liabilities Long-term debt Deferred income taxes and other liabilities Total liabilities \begin{tabular}{rrr} $207,692 & $ & 1,926,923 \\ 28,896,154 & & 35,546,154 \\ 20,615,385 & & 20,915,385 \\ 18,157,692 & & 23,336,581 \\ 842,308 & 582,650 \\ \hline 68,719,231 & 82,307,693 \\ 16,765,384 & 18,088,462 \\ 3,942,308 & 4,253,846 \\ \hline 89,426,923 & 104,650,001 \end{tabular} Shareholders' equity Common stock at par value Capital in excess of par value Unearned stock compensation Accumulated other comprehensive income Retained earnings Total shareholders' equity Total liabilities and shareholders' equity \begin{tabular}{rr} 107,692 & 107,692 \\ 17,669,231 & 14,192,308 \\ (380,769) & (450,000) \\ (5,850,000) & (4,273,077) \\ 122,857,692 & 111,038,461 \\ \hline 134,403,846 & 120,615,384 \\ \hline$223,830,769 & $225,265,385 \\ \hline \hline \end{tabular}