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Materiality is a very important consideration in proposing adjusting entries to clients. It is, however, a
rather complex calculation and you are not required to calculate materiality for this assignment. However, for
purposes of this assignment, you should consider any misstatements of accounts to be material and you
should propose an adjusting entry. You should also assume that the client is receptive to the proposed entries
and will book them (record them) in a timely manner.
Choosing a sample selection is another important consideration when performing tests of details (substantive
testing). Materiality typically factors into the calculation for selecting a sample size (and for this assignment you
are not calculating materiality). Therefore, for purposes of this assignment, your sampling selection should be
such that you have at least 75% coverage of all account balances being tested.



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