14 July 2016
The performance materiality is based on the risk factor. Let us assume that you have calculated materiality as certain percentage (let say 1%) of turnover, asset or profit and the resulted materiality is 2 crores. Now you need to do risk assessment of the organization and arrive at a conclusion that the risk may be high, low or medium. Thus based on your risk factor your performance materiality changes. (let say 80% of the materiality, the risk being low...so the performance materiality is 1.60 crores). More the risk of the organization, the performance materiality decreases..which means that your sample size would increase if the risk is high.
14 July 2016
It is a percentage based on the risk assessment done for the organization. You may have percentage like for high risk it could be 20%, medium risk 60% to 70% and for low risk 80%
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