What benchmark would you use to calculate materiality? Why? ((a)Net Income, (b) Assets, (c) Revenue, or (d)Equity.) (Pick 1 letter & Explain why)

a. 5 percent to 10 percent of net income before taxes.

b. percent to 1 percent of total assets.

c. percent to 1 percent of total revenues.

d. -1 percent of total equity.

4. Would you use a higher percentage or a lower percentage for the benchmark you selected in Q3 above. (EX: 5% of Net Income vs 10% of Net Income)? Explain why?

5. Using the choices from Q3 & Q4 above calculate "overall materiality" for your audit for 2019? (ex: Benchmark %(1%) * Assets ($25m)= $250K (Overall Materiality)).