Revenue Accounts and Management Assertions

[@labcdel4384]

Amazing content, thanks for all the amazing accounting, finance, and audit videos. Keep it up, your videos have taught me so much, over traditional college lectures.

[@Edspira]

Glad to hear you're enjoying the videos. I've got a lot more on the way!

[@eisenhoward1]

Been auditing for 6 months and this is the first time I am sort of understanding what I'm doing everyday 😅. Thanks!

[@Edspira]

Happy to hear that. I hope you're enjoying the job and that you have a great start to your career!

[@anelekawandy]

You sir are doing the Lord's work, thank you so much

[@lolatatasja]

Thank you! This finally made it click!!

[@Edspira]

Glad it helped!

[@cerealpowder1486]

Such a fire channel.

[@NeyTorres]

How do you access if something is "material" or inmaterial? Is this based on statistics of the size of the account vs the rest of the balance sheet/income statement?

[@Edspira]

Every audit is different. For a large company, the auditor might decide that anything under $10,000 is immaterial. Thus, if you found that the client overstated revenue by $7,500 it would be deemed immaterial. But for a small company, $7,500 might be considered material. And sometimes several small "immaterial" amounts can have a "material" effect on the financial statements when you consider the small amounts in the aggregate. Thus, you have asked an excellent question for which there is no easy answer 😀

[@NeyTorres]

@@Edspira Thank you for the answer. And this is based on a board meeting in one of the big 4? or are this method dictated by a national council? Or completely depend on the leader of the team (assuming a big company) or auditor (assuming a small one)? I bet there are parameters for this.

[@Edspira]

The audit firm will assign someone to be lead the audit engagement (sometimes it is an audit partner, but it could be an audit manager). That person will have significant influence over setting the materiality threshold, although they may receive input/guidance from the audit firm's national office. The audit firm might have clients of very different sizes, so what is "material" for one audit client might be "immaterial" for a different audit client

[@NeyTorres]

@@Edspira this is gold. thank you!

[@varshitachaplot4438]

Explained well

[@pineappleognam421]

please make these audit available in free pdf's just like FAR and Managerial. Thank you so much!

[@Edspira]

I'm writing a PDF to go with these audit videos and will be distributing it for free to anyone signed up for my email list (I'll probably have the guide ready in in the next couple weeks)

[@pineappleognam421]

@@Edspira yey !!! you're such a blessing to us. God Bless

[@mustakes]

⭐️⭐️⭐️⭐️⭐️

[@ayushbhardwaj6899]

ur amazing