Banks are specifically interested in accounts receivable and inventory as these are collateral for a commercial loan. Assuming that you are the auditor of a client with a bank loan. The client has total assets of S1,815,000, and the combined accounts receivable and inventory represents 491 of total assets. Requirement: Recommend a related specific performance materiality as a percentage of the composition of accounts receivable and inventories.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Banks are specifically interested in accounts receivable and inventory as these are collateral for a
commercial loan.
Assuming that you are the auditor of a client with a bank loan. The client has total assets of
S1,815,000, and the combined accounts receivable and inventory represents 491
of total assets.
Requirement:
Recommend a related specific performance materiality as a percentage of the composition of
accounts receivable and inventories.
Transcribed Image Text:Banks are specifically interested in accounts receivable and inventory as these are collateral for a commercial loan. Assuming that you are the auditor of a client with a bank loan. The client has total assets of S1,815,000, and the combined accounts receivable and inventory represents 491 of total assets. Requirement: Recommend a related specific performance materiality as a percentage of the composition of accounts receivable and inventories.
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