This is an excerpt from the trial balance for Sinclair Pastoral Group (SPG).Performance materiality for the trial balance has been assessed as $4.2M for 2020 and $3.9M for 2019 (70%).

• Explain how you would apply materiality to each of the following accounts
• Determine a planning inherent risk assessment for each account.
• Undertake a trend analysis for each account and explain what you found and the impact on audit planning

Use the numbers in the first column to record your response.

No.

Account Name

2018

M's

2019

M's

2020

M's

1

Employee expenses

50.888

51.787

47.903

2

Finance Costs

16.147

15.773

14.935

3

Income tax (expense)/benefit

8.116

61.460

(15.811)

4

Intangible Assets

3.801

2.534

1.995

5

Deferred Tax Liabilities

2.123

30.732

64.518