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Based on the relevant professional literature, certain observations can be made:
• The consideration of materiality is complex and requires substantial professional judgment in preparing or auditing financial statements. ...
• There are two types of materiality: accounting materiality and auditing materiality. ...
• On the other hand, auditing materiality relates to the planning of the nature, extent and timing of audit testing, and is very closely aligned with the risk-based approach to auditing. ... The concern of auditing materiality is for the risk of failing to detect errors in excess of this level. ... While materiality in auditing is concerned with materiality from an accounting standpoint, it is quite different. ... Variables relevant to materiality judgments
Materiality and Audit Risk
The notions of risk and materiality are two of the most fundamental concepts of auditing theory and practice. ... Auditing is risky, there is always the chance of getting it wrong. ...
References:
Auditing Standard, Auditing & Assurance Standards Board (2001). ... Auditing: Theory and practice in New Zealand.
Approximate Word count = 1892
Approximate Pages = 7.6
(250 words per page double spaced)
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