CAF-8 · Chapter 3 · Question 7 of 10
When auditing an unlisted, not-for-profit charitable trust, what is generally the most appropriate benchmark for setting overall materiality?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Total revenues or total expenses
Explanation
For a not-for-profit entity, profit is not the primary focus of the users. Total revenue (donations/grants) or total expenses reflect the scale of operations and are the best benchmarks.
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