You have been asked to perform a substantive analytical procedure to obtain assurance regarding the reasonableness of the total rent revenue for LSS for the 2012 fiscal year. Your audit team has determined that $1 million is the materiality threshold (i.e. tolerable misstatement) to be used for this substantive analytical procedure for this client. To assist you in completing your analytical procedure, two first-year staff members on your audit team compiled the following information for you:
Also the 2012 rent revenue was $118,187,453.
2014 information
Total Number of Storage Units: 460,000.
Weighted Avg. Revenue per Square Foot $1 1.10.
Weighted Average Occupancy 90%
Weighted Average Square Feet per Unit 226.09
1. Using the information provided, develop your own expectation of the total rent revenue for Logan Self Storage (LSS) for the 2012 fiscal year.
2. Based on the estimate you calculated for Requirement 1, does the reported rent revenue appear to be fairly stated in all material respects? Why or why not?