EXHIBIT 3 Audit Team Planning DiscussionMateriality BES Associates January 7, 2019 Audit Team Planning DiscussionMateriality Attendees: Juan Garrido (Staff), Bruce Allen (Senior), Cynthia Waters (Manager), Mary Liu (Partner). On Friday, January 7, 2019, the audit team of Southern Industries met to discuss how to appropriately set materiality for the FY 2018 Southern Industries audit. We note that SI is a for- profit entity making revenue and pretax income suitable bases for initial assessments of materiality. However, SI has posted a net loss for FY 2018, making pretax income an unsuitable base. As such, we have elected to use FY 2018 revenues as our base for calculating materiality. We elected to use .5% of revenues due to our assessment of the risk of material misstatement as high. Our calculation of planning materiality and tolerable misstatement is given in the table below. Revenues $4,046,090 % of Base .5% Planning Materiality (PM) $20,230 % of PM 50% Tolerable Misstatement (TM) $10,115 Based on the calculation above, the audit team has set tolerable misstatement at $10,000

auditing accounting question.