Sa 320

Total revenue 100 cr...your percentage maybe 1%, i.e. 1 cr....but if you are taking pbt as benchmark, say pbt of 10%, pbt is 10 cr...here you want to take higher %, say 10% so you choose items of values of 1 cr

Siva Siva

Qualified CA

★ 27K+

13-Mar-22 22:45

While determining materiality auditor usually choose a benchmark such as net profit, revenue, total assets etc. Based on selected benchmark auditor need to arrive at a percentage to determine materiality. Generally sales of an entity are greater than profit. So if auditor choose profit as benchmark , % to determine materiality is usually higher.

vishwam mandepudi

Qualified CA

★ 2K+

14-Mar-22 11:03

Means upto 10 cr value items are immaterial ð?¤?

Thread Starter

Pandusml V

CA Final

★ 4K+

14-Mar-22 12:03

If you consider 1% of turnover as benchmark then value up to 1 crore(100 crore* 1%) may not be considered material.

vishwam mandepudi

Qualified CA

★ 2K+

14-Mar-22 15:51

Ok thank you

Thread Starter

Pandusml V

CA Final

★ 4K+

14-Mar-22 17:15