Select a publicly traded U.S. company and obtain their most recently published annual financial statement from the library's NetAdvantage database. Turn in the following:
1. Calculate the company's overall materiality level using 5% of net income. Explain whether you believe that this quantitative calculation method is appropriate for your company.
2. Obtain the last S&P analysts' forecast estimate given for your selected company prior to the financial statement date under part 1. You can do this in Net Advantage by clicking on "S&P" Equity Research" and searching for "EPS Estimates" reports in the last 12 months. Convert the difference between (Actual EPS - Estimated EPS) into a dollar value by multiplying this by actual net income. Is this smaller than the quantitative materiality in part 1? If so, do you believe that there may be a qualitatively material misstatement for your company?