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
- Choose a bechmark
- Determine the level of bechmark
- Justify the choices