"How do you set materiality levels for period-ending
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How do you set materiality levels for period-ending accounting estimates?
Answers
It's good to check in with the outside auditors on the materiality level for the quarterly and year end numbers based on your forecasted PL and Balance Sheet. You can then use this a guide for what materiality level you want to use for the monthly numbers as well. It's possible you will use a tighter level on the shorter time periods, since you will typically earn less money in a month than over the whole year.
It's been a number of years since I was an
It depends on who your external accounting firm is at to whether they will share materiality $$ thresholds with you. Some will share while others are more cautious. Also, keep in mind the auditors must consider other qualitative factors about the estimates including appropriate and reliable methodology to arrive at the estimate, adequacy of skill level of those making the estimates, reliable source information etc.
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Accounting