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08 March 2017 can any one explain me with examples what is materiality , performance materiality and tolerable misstatement
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CA Amrita Chattopadhyay

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CA Amrita Chattopadhyay (Expert)
10 March 2017 Materiality is the amount which is considered above which all the transaction will be checked by the auditor. The materiality is considered for the company as a whole while performing the audit. Performance materiality is calculated on the basis of risk factor which means that if the risk for a particular function or area is more than other, the material amount would be reduced. Tolerable misstatement is the acceptable limit to which the misstatement would be allowed. For example, if the turnover of the company is INR 1000 crores. INR 50,000 can be considered to be tolerable misstatement
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