Anne Aylor Case
Anne Aylor, Inc.
Determination of Planning Materiality and Tolerable Misstatement
MARKS. BEASLEY· FRANK A. BucKLEss ·STEVEN M. GLOVER· DouGLAS F. PRAWITT
LEARNING OBJECTIVES
After completing and discussing this case you should be able to
[1] [2]
Determine planning materiality for an audit client Provide support for your materiality decisions
[3]
Allocate planning materiality to financial statement elements
INTRODUCTION
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Anne Aylor, Inc. (Anne Aylor) is a leading national specialty retailer ofhigh-qualitywomen's apparel, shoes, and accessories sold primarily under the "Anne Aylor" brand name. Anne Aylor is a highly __ recognized national brand that defin_s_a _ e dis_tin_t_ c fashion_point of v:iew.--.Anne Aylor merchandise represents classic styles, updated to reflect current fashion trends. Company stores offer a full range of career and casual separates, dresses, tops, weekend wear, shoes and accessories coordinated as part of a total wardrobing strategy. The company places a significant emphasis on customer service. Company sales associates are trained to assist customers in merchandise selection and wardrobe coordination, helping them achieve the "Anne Aylor" look while maintaining the customers' personal styles. The company follows the standard fiscal year of the retail industry, which is a 52-or 53week period ending on the Saturday closest to January 31 of the following year. Net revenue for the year ended January 291 2011 (referred to as fiscal2011) was $1.4 billion and net income was $58 million. At the end of fiscal 2011, the company operated approximately 584 retail stores located in 46 states under the name Anne Aylor. The company's core business focuses on relatively affluent, fashion-conscious professional women with limited shopping time. Substantially all of the company's merchandise is developed in-house by its product design and development teams. Production of merchandise is sourced to 131 independent manufacturers
Determination of Planning Materiality and Tolerable Misstatement
MARKS. BEASLEY· FRANK A. BucKLEss ·STEVEN M. GLOVER· DouGLAS F. PRAWITT
LEARNING OBJECTIVES
After completing and discussing this case you should be able to
[1] [2]
Determine planning materiality for an audit client Provide support for your materiality decisions
[3]
Allocate planning materiality to financial statement elements
INTRODUCTION
j--
Anne Aylor, Inc. (Anne Aylor) is a leading national specialty retailer ofhigh-qualitywomen's apparel, shoes, and accessories sold primarily under the "Anne Aylor" brand name. Anne Aylor is a highly __ recognized national brand that defin_s_a _ e dis_tin_t_ c fashion_point of v:iew.--.Anne Aylor merchandise represents classic styles, updated to reflect current fashion trends. Company stores offer a full range of career and casual separates, dresses, tops, weekend wear, shoes and accessories coordinated as part of a total wardrobing strategy. The company places a significant emphasis on customer service. Company sales associates are trained to assist customers in merchandise selection and wardrobe coordination, helping them achieve the "Anne Aylor" look while maintaining the customers' personal styles. The company follows the standard fiscal year of the retail industry, which is a 52-or 53week period ending on the Saturday closest to January 31 of the following year. Net revenue for the year ended January 291 2011 (referred to as fiscal2011) was $1.4 billion and net income was $58 million. At the end of fiscal 2011, the company operated approximately 584 retail stores located in 46 states under the name Anne Aylor. The company's core business focuses on relatively affluent, fashion-conscious professional women with limited shopping time. Substantially all of the company's merchandise is developed in-house by its product design and development teams. Production of merchandise is sourced to 131 independent manufacturers