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.

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.

Contemporary Auditing

11th Edition

ISBN:9781337650380

Author:KNAPP

Publisher:KNAPP

Chapter1: Comprehensive Cases

Section1.11: New Century Financial Corporation

Problem 4Q

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