Index CX-4: FINANCIAL STATEMENT MATERIALITY WORKSHEET FOR PLANNING PURPOSES Balance Sheet Date: Date: Completed by: Instructions 1. This form should be completed for all audit engagements. See Section 203. The purpose of this form is to determine and document the materiality amount that will be considered suitable for audit planning purposes 2. Use amounts from the financial statements to be audited or the trial balance from which those financial statements will be prepared whenever available. If not available, use annualized amounts from the most recent interim financial statements. For revenue, use an annualized amount even if the period is shorter than a year When current amounts are unavailable or when significant audit adjustments to client-prepared accounting data are expected, use historical averages based on the past two or three years. (Attach the calculation ona separate page.) 3. 4. Based on your professional judgment, detarmine a planing materiality amount using the following table as a If the Base Amount (larger of total assets or total revenue) is:Planning Materiality le: Over But Not Over Amount + (Percent Base) $50 thousand $100 thousand $500 thousand $1 million $5 million $10 million $50 million So 0 + 5.5% 1,250 + 3.0% 2.250 + 2.0% 7,500 + 1.0% 9,500 + 0.8% 19,500 +0.6% 40,000 + 0.4% 115,000 +0.25% 185,000 + 0.18% $50 thousand $100 thousand $500 thousand $1 million $5 million $10 million $50 million $100 milion $100 mition Example: If the base amount were $3.5 million, then the planning materiality amount would be as follows $9,500 + (.008 $3,500,000)-$37,500 Round amount to two significant digits: $38,000 tolerable misstatement (as well as completion of audit planning, determining the extent of substantive Calculation of planning materiality and asts, and computing sampie sizes) can be automated using PPC's Engagement Manager For order infcrmation, call (800) 323-8724 CX-4 Index CX-4: FINANCIAL STATEMENT MATERIALITY WORKSHEET FOR PLANNING PURPOSES Balance Sheet Date: Date: Completed by: Instructions 1. This form should be completed for all audit engagements. See Section 203. The purpose of this form is to determine and document the materiality amount that will be considered suitable for audit planning purposes 2. Use amounts from the financial statements to be audited or the trial balance from which those financial statements will be prepared whenever available. If not available, use annualized amounts from the most recent interim financial statements. For revenue, use an annualized amount even if the period is shorter than a year When current amounts are unavailable or when significant audit adjustments to client-prepared accounting data are expected, use historical averages based on the past two or three years. (Attach the calculation ona separate page.) 3. 4. Based on your professional judgment, detarmine a planing materiality amount using the following table as a If the Base Amount (larger of total assets or total revenue) is:Planning Materiality le: Over But Not Over Amount + (Percent Base) $50 thousand $100 thousand $500 thousand $1 million $5 million $10 million $50 million So 0 + 5.5% 1,250 + 3.0% 2.250 + 2.0% 7,500 + 1.0% 9,500 + 0.8% 19,500 +0.6% 40,000 + 0.4% 115,000 +0.25% 185,000 + 0.18% $50 thousand $100 thousand $500 thousand $1 million $5 million $10 million $50 million $100 milion $100 mition Example: If the base amount were $3.5 million, then the planning materiality amount would be as follows $9,500 + (.008 $3,500,000)-$37,500 Round amount to two significant digits: $38,000 tolerable misstatement (as well as completion of audit planning, determining the extent of substantive Calculation of planning materiality and asts, and computing sampie sizes) can be automated using PPC's Engagement Manager For order infcrmation, call (800) 323-8724 CX-4
