ABC Wholesalers Ltd Essay

You are nearing completion of the 31 December 2015 audit of alphabet Wholesalers Ltd. The figures downstairs have been extracted from the final draft financial report.During you review of the audit files, you differentiate the following items recorded on the summary of audit differences. 1. ABC Wholesalers has been abstruse in a long-running dispute with the taxation authorities in copulation to the amount of sales tax payable on certain lines of merchandise. The study was resolved this year in favour of the taxation authorities. The court rule that ABC Wholesalers, as well as paying the outstanding taxes, must pay a non-tax-deductible fine of $420,000. 2. Sales cut-off at one of ABC Wholesalers breeds was incorrect, resulting in a large sale of arsenal do early in January 2015 being recorded in the 31 December 2014 year-end.The cost price of the inventory sold was $250,000. ABC Wholesalers label up inventory by 40%. 3. Purchases cut-off at the same store was also incorre ct, resulting in a large purchase of inventory made in late December not being recorded until January 2015. The explanation price of the inventory purchased was %5,950,000. You also note that the planning materiality direct was set by the audit manager at $200,000. Questiona) forecast items 1-3 independently. State whether the amounts involved would be considered material for the purpose of issuing an listeners report. Give reasons. b) Explain the relevance, if any, of the planning materiality level to your decisions in a).