Income Statement Assignment

One of the audit clients Airtel has presented the income statement below to the audit firm Earnest and Young where you work as an assistant auditor.

Airtel Income Statement for the year ended December 31, 2018                                   ZMK

Revenue                                                                                                                          1,392,000

Cost of goods sold                                                                                                              680,480

Gross profit                                                                                                                         711,520

Distribution Administration expenses                                                                                367,200

Profit from Operation                                                                                                         344,320

Other income

Gain on sale of equipment                                                                                                   56,000

Income before taxes                                                                                                           400,320

Income taxes                                                                                                                      118,400

Net income                                                                                                                         281,920

The audit partner has decided that 5% income before taxes benchmark is appropriate for overall materiality and tolerable misstatement has been estimated to be 60% of overall materiality.

Required

a) Explain what overall materiality is and state some factors that the partner would have considered in deciding the 5 percent benchmark (5 marks)

b) Explain what tolerable misstatement is and state some factors that the partner would have considered in deciding the 60 percent benchmark.(5 marks)

c). Calculate the overall materiality, and tolerable misstatement. (2 marks)

d). During the course of the audit, the auditors discover that the revenue account has an invoice which was misstated by K8,200 explain the action that the auditors will take

e) Further, the auditors discover that in the distribution and Administration expenses account some invoices have been misstated by K17, 500.Explain the action that the auditors will take (3 marks)

f) Taking into account the two errors in (d) and (e) above, state the recommendations and explain the final decision that the auditor will make (7 marks) Get Finance homework help today

Calculate the price
Make an order in advance and get the best price
Pages (550 words)
$0.00
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with Australia Assessments
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
Testimonials
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Military
good job
Customer 456821, October 24th, 2022
Other
Good follow-up task.
Customer 459155, April 7th, 2022
Political science
Great Job Bless your heart and soul
Customer 453983, February 7th, 2020
Communications
Excellent. Thank you!
Customer 462787, August 23rd, 2022
English 101
i received the paper early
Customer 461063, November 1st, 2022
Military
excellent job
Customer 456821, October 14th, 2022
Entertainment & Gaming
Good work.
Customer 452441, April 4th, 2022
Other
Michelle is a great writer! Assignment on time.
Customer 463427, October 1st, 2022
Nursing
Awesome! Thanks
Customer 454007, June 19th, 2020
Ethics
Thanks so much!!!
Customer 454087, June 24th, 2020
Business
Good work. Looking foward to future contributions.
Customer 463463, October 29th, 2022
Classic English Literature
Good work.
Customer 460021, June 3rd, 2022
11,595
Customer reviews in total
96%
Current satisfaction rate
3 pages
Average paper length
37%
Customers referred by a friend
OUR GIFT TO YOU
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat