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Wyly Waste Management. Wyly waste management ("WWM") is an SEC registrant and your firm is its auditor. Overall materiality for the audit is S100, 000. Shortly after the end of the year, WWM's CFO is meeting with your audit partner to review the preliminary results of the audit. The engagement partner presents a copy of the draft unadjusted error summary to the CFO, which contains one error. During the year, WWWM did not capitalize individual expenditures of less than $10,000, which is in accordance with its company policy. In the past, WWM's capital expenditures have been relatively material errors.
In the prior two years, the expensed items totaled $7,500 and $5,000, respectively. However, in the current year, WWM undertook significant development of a new waste disposal plant. As a result, WWM incurred eight capital expenditures of less than $10,000 each that were not capitalized. These purchases totaled$75,000
Required:
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