ACCT 497 Lecture Notes - Lecture 8: Cloud Computing, Audit Risk, Financial Statement
22 Feb 2017
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Document Summary
Something you assess based on what you have: acceptable audit risk. Something you bring in or something you are trying to maintain: planned control risk, planned detection risk. Materiality refers to an amount (or transaction) that would influence the decisions of users (i. e. , an amount (or event) that would make a difference). The emphasis is on user, rather than management or the audit team. Ultimately, materiality is a matter of professional judgement. As a guide to planning substantive procedures directing attention and audit work to those items or accounts that are important, uncertain, or susceptible to errors or frauds. As a guide to evaluation of the evidence. Auditors use performance materiality to make sure that the aggregate of uncorrected and undetected immaterial misstatements does not exceed materiality for the financial statements as a whole. As a guide for making decisions about the audit report.
