Uul ALLE 42231 19/24/19 28. For the following scenario, perform the three steps in the materiality process: materiality, (2) determine tolerable misstatement, and (3) evaluate the audit findings op materiality process: (1) determine overall Murphy & Johnson is a publically traded manufacturer of engines for lawn-mowers, trac Snowmobiles. The components of its financial statements are (1) income before taxes atements are (1) income before taxes = $21 million, total assets = %550 million, and (3) total revenues - $775 million. has been stable year to year but the company has experienced the following: (1) Material misstatements in prior years, and (2) the entity operates in a volatile environment and nas complex operations. Determine overall materiality and determine tolerable misstatement. Justy your decision b. During the course of the audit, Murphy & Johnson's CPA firm detected two misstatements that aggregated to an overstatement of income of $1.25 million. Evaluate the audit findings and justify your decision