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You are planning the audit of Robo Tech Ltd. You have set the preliminary judgment about materiality for the financial statements as a whole at
You are planning the audit of Robo Tech Ltd.
You have set the preliminary judgment about materiality for the financial statements as a whole at $80 000. You have determined that:
- The company has strong credit policies, and most customers generally pay their full balance on time.
- As the competition in the microelectronic industry is high, the inventory can become obsolete quickly due to rapid technology changes. Analysts often focus on the annual Inventory Turnover ratio.
Asset balances for the current year are shown below:
| Current year (unaudited) |
Cash | $ 300 000 |
Accounts receivable | 2 800 000 |
Inventory | 2 300 000 |
Other assets | 1 800 000 |
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