Assume that from a quantitative perspective, a company would set materiality at $50,000. Further assume that the company has existing debt covenants of a current ratio of 2.0 or higher; and, Working capital limit of $210,000 or higher. If either covenant is violated, then the debt could be called immediately, resulting in the companys bankruptcy. Reported current assets are $420,000, while reported current liabilities are $200,000. Current liabilities have been audited. The auditor is satisfied with the number for current liabilities.

Considering debt covenants as a qualitative materiality factor as discussed in class, the auditor would likely set materiality for current assets at a. $ 50,000 b. 20,000 c. 10,000 d. 5,000