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What does it mean, if a company has an investment portfolio that is 70 times materiality...

What does it mean, if a company has an investment portfolio that is 70 times materiality ? what is the risk of assessment if 70 times materiality?

given:

Materiality=$150

Performance materiality=$105

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Answer #1

If the Company has investment portfolio that is 70 times materiality, this means the value of investment must be ($150 x 70 times) $10,500.

While performing risk assessment procedures, the investment accounting cycle must be ticked as significant. Significant accounting cycle has more audit procedures as compare non-significant accounting cycles. Based upon auditor's professional judgement, investment valuation may be the risk area to be selected during the risk assessment procedures. Engagement team document the same in work papers and discuss the same with engagement partner during the discussion among the audit team members.

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