GM's 2002 10-k can be found at http://www.sec.gov/Archives/edgar/data/40730/000004073003000054/complete10k.txt (Links to an external site.)

Using the annual financial results of General Motors for the year ended December 31, 2002 (use un-restated amounts), calculate various quantitative materiality amounts potentially used by Deloitte. Calculate using multiple benchmarks and multiple relevant percentages. Based upon these benchmarks and relevant percentages, note the range of materiality amounts (a high value, a low value) and the amount you would have selected. Explain, briefly, why you selected that amount.

Given the amounts calculated and the amount of the error in the financial statements (assuming a 6.5% discount rate was correct but 6.75% was used), do you believe the choice of the higher discount rate had a material impact on the 2002 financial position of the firm? Document your conclusion as well as describing how you came to that conclusion.

Finally, the total audit fee for the General Motors audit for 2002 was approximately $25 million, and total fees paid to Deloitte (including the audit fee) were $156 million. The total public company audit fees for the Detroit office for Deloitte and the entire US practice were $59 million and $840 million, respectively in 2002. The total fees paid to Deloitte by audit clients, including audit fees, for the Detriot office for Deloitte and the entire US practice were $211 million and $1.8 billion Do you think that the proportion of the GM audit fee to total US fees may have impaired the partners independence? What about the proportion of the GM audit fee to total Detroit fees? What about GM non-audit fees?