Anne Aylor Case

7

Planning

Materiality

C A S E S I NC LU DE D IN T HI S S E CTION

7.1 A nne Aylor, Inc.

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229

Determination of Planning Materiality and

Tolerable Misstatement

O T HE R C A S E S T HAT DI S CU SS T OPIC S R ELATED TO THI S S ECTION

5.6

Sarbox Scooter, Inc.

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185

Scoping and Evaluation Judgments in the Audit of Internal

Control over Financial Reporting

12.1 EyeMax Corporation . .

Evaluation of Audit Differences

.......................

12.2 Auto Parts, Inc. . . . . . . . . . . . . . . . . . . . . . . . .

Considering Materiality When Evaluating Accounting Policies and

Footnote Disclosures

INSTRUCTOR RESOURCE MANUAL — DO NOT COPY OR REDISTRIBUTE

.....

369

379

INSTRUCTOR RESOURCE MANUAL — DO NOT COPY OR REDISTRIBUTE

CASE

Anne Aylor, Inc.

7.1

Determination of Planning Materiality

and Tolerable Misstatement

M

S. B

F

A. B

S

M. G

D

F. P

I N S TR U C T IO NAL O B JE C T IVE S

[1]

[2]

[3]

To provide experience with establishing planning

materiality.

To provide experience with establishing tolerable

misstatement for individual nancial statement

accounts.

To illustrate factors considered when establishing

planning materiality.

[4]

[5]

[6]

To illustrate di erent materiality bases considered

when establishing planning materiality.

To illustrate factors considered when determining

tolerable misstatement for individual accounts.

To illustrate reasons why the sum of tolerable misstatements commonly exceeds planning materiality.

KEY FACTS

Anne Aylor, Inc. (Anne Aylor) is a publicly traded company (New York Stock Exchange) that

had 60,879,663 shares of common stock outstanding with a trading price of $24.42 as of the

close of business on March 1, 2008. Anne Aylor is a leading national specialty retailer of betterquality women’s apparel, shoes, and accessories

At the end of fiscal 2007, Anne Aylor operated...