Page 15 - PowerPoint Presentation
P. 15

IMPORTANT ELEMENTS OF THE AUDIT PROCESS




            SETTING MATERIALITY LEVELS




            • Involves quantifying the amount of misstatements


                the auditor will be able to “live with”.



            • Thereafter, materiality is considered at the FSLI

                level, and this is what determines the tests


                performed.



            • Setting materiality for FSLIs is very subjective and


                requires significant professional judgement.



            • Audit firms have different ways of approaching this


                but the principles remain the same.









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