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IMPORTANT ELEMENTS OF THE AUDIT PROCESS
THE CONCEPT OF MATERIALITY
• Materiality is one of the most important concepts in
auditing.
• Its generally accepted that AFS are not 100%
accurate, but what is the acceptable margin of error?
……materiality!
• Refer to ISA 320 – Materiality in planning and
performing an audit and ISA 450
• Misstatements, including omissions are considered
material if they, individually or in aggregate could
reasonably be expected to influence the economic
decisions of users taken on the basis of the financial
statements.
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