A-4 Materiality determination

Illustrative planning worksheet layout as used in GAASFlow. Benchmarks and percentages are engagement-specific judgment examples for the fictional Summit Ridge sample — not firm policy.

Benchmark & calculation

Input	Amount / rate	Notes
Primary benchmark	Net sales (revenue)	Stable operating metric for this manufacturer
Benchmark amount	$18,500,000	From trial balance / financials
Overall materiality %	1.0%	Within common practice range; qualitative factors considered
Performance materiality %	75%	Of overall materiality
Clearly trivial %	5%	Of overall materiality

Qualitative considerations

• Single manufacturing location; multi-state customer base
• No public markets; privately held C-corporation
• Fraud risks (revenue recognition, management override) considered engagement-wide
• Amounts carried to engagement master and sampling / exception evaluation

Conclusion

Overall materiality is set at $185,000 (approximately 1% of revenue). Performance materiality is $138,750. The clearly trivial threshold is $9,250. These amounts are documented on the engagement master and used for scoping and evaluation under AU-C 320 orientation.

GAASFlow sample output · Not firm policy · Product tour · Free trial