ACC 821 Lecture Notes - Lecture 4: Audit Evidence, Audit Risk, Beehive
Document Summary
The case requires consideration of the factors that determine the materiality level for audit purposes, in partocular a decision to reduce the materiality level. A. for currect year . the magnitude of incone, other financial statement items, the users and the potential impact of errors on their decisipns, and other qualitative factors can be discussed. Materiality decisions are highly judgmental, so a lot of variability in practice is inevitable. Even the same auditor may want to use a diff. app. In a diff. audits, sicne the decision is based on many qualitatice factors that will be context specific. In the standards can prevent auditors in practice from starting to take too mich of a literal cookbook" attitude about what the standards require. Acclocating materiality to various accounts may be done but that meand you are going with a lower total mat. The auditors determination of materiality is a mtter of pro.