Page 20 - PowerPoint Presentation

IMPORTANT ELEMENTS OF THE AUDIT PROCESS

MATERIALITY AT THE EVALUATION STAGE (FINAL

MATERIALITY (FM)

• ISA 450 - states that the auditor must;

• Evaluate the effect of identified misstatements on the audit

and

• Evaluate the effect of uncorrected misstatements if any, on
the financial statements.

• FM is the materiality level against which the auditor

measures the effect of uncorrected misstatements on

the financial statements.

• Per ISA 450 the auditor must accumulate (record) all

misstatements identified on the audit unless they are

clearly trivial. Clearly trivial means the misstatement is

very small, insignificant and inconsequential.

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