You are the auditor of Sunshine Ltd (Sunshine), a publicly

You are the auditor of Sunshine Ltd (Sunshine), a publicly listed company. Sunshine has a major shareholder that controls its board of directors. The following financial information has been extracted from the client’s accounting records:

Sunshine is a manufacturer that sells mainly to the infrastructure construction industry. The national economy is currently static and consumer confidence falling in the last two quarters. Sunshine has an internal audit function that in previous years you have assessed as effective. Your experience with the company in past years has also shown that its annual forecasts are generally reliable.

Required:

1. Based on above information, suggest an appropriate benchmark (base) for determining preliminary materiality for Sunshine. Give reasons
2. List FIVE factors you would consider in determining materiality for the audit for the period ended 30 June 2022 and explain how those factors affect your assessment of materiality.