1. Auditors often select a benchmark item from the financial statements and apply a percentage when setting materiality. Propose a possible range of benchmarks and the source documents containing them in the case of Marianne Limited. What are your considerations when you decide a benchmark and the percentage? What documentation you would suggest for such work?
2. How would you consider the impact of the above unusual items when determining materiality for Marianne Limited? What is your response to these unusual items in concluding a benchmark and its amount or magnitude?
3. What is materiality? In setting the planning materiality for Marianne Limited's financial statements as a whole, what factors (including client information and your understanding about the client) you should consider?