Question

Describe Materiality for an audit.

Describe Materiality for an audit.

Homework Answers

Answer #1

Answer : Materiality for an audit

  • Materiality for an audit is basically relates to "Financial Reporting" of given details or misstatements found during the audit.
  • Misstatements are considered to material if they could affect the decisons of users of financial statements.
  • Judgements about  Materiality of any item based upon factors like size and nature of item.
  • The concept of Materiality is a fundamental to audit.

Determining Materiality for an audit :

There are three key steps for detetmining the overall materiality for an audit

  1. Choose a bechmark
  2. Determine the level of bechmark
  3. Justify the choices
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