ASSIGNMENT: For this assignment you are to assume the manager role for the Blue Devils audit firm and you are assigned to create the audit plan for Amazon or Costco. You will be required to obtain the last two years worth of financial statements and the current years audit report. You are going to assess the overall audit risks and revenue audit plan. You will prepare the audit plan in a memo to your engagement team. Your memo will be a MAXIMUM of 4 pages single spaced, Times New Roman 12 pt. Font, 1 inch margins all around. Specifically, you are charged with the following tasks.

1. Calculate materiality and explain the level of planning materiality you plan to use for this years audit. A. Suggest three potential materiality bases and percentage ranges for each range that you believe should be considered in establishing planning materiality. B. Based on your analysis in part 1A choose the best approach for planning materiality for the current year audit engagement and document your recommendation using arguments that you believe would be most defensible to internal and external stakeholders. C. For the benefit of enhancing audit efficiency during the engagement, calculate tolerable misstatement you will use when auditing revenue and how you chose this number.