Ashbourne 2022 Trial Balance Ledger

Business Task: Materiality Assessment for Year-End General Ledger

Business Question:

We are conducting a year-end financial audit for Ashbourne Industries Inc.

and require your assistance in performing a materiality assessment on the

general ledger accounts.

Scope of Work:

Use the December (year-end) balances from the provided general ledger Excel

file. Monthly data (January-November) can be ignored. Determine which accounts

are material, based on the materiality threshold.

Business Instructions:

1. Summarise account balances in the summary table using the following code

groupings.

10000 series: Assets

20000 series: Liabilities and Equity

30000 series: Revenue

40000-80000 series: Expenses

2. Calculate pre-tax income:

Net income = Revenue - Expenses

Taxes = Sum of accounts 81000-82000

Pre-tax income = Net income + Taxes

3. Materiality Threshold:

Overall materiality = 1% of pre-tax income

Performance materiality = 75% of the above amount

4. Materiality Check:

Identify and flag all accounts whose December balances exceed the

performance materiality threshold.

Analytical tools used: Microsoft Excel

Python (Spyder IDE)

File script zipped for easier uploading here