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Ipcc audit query

Ritika (STUDENT) (266 Points)

31 July 2012

can smone plz explain to me this concept??? what is audit materiality? what is the relationship between materiality nd risk???

thankss .

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3 Replies

CS RAJESH C.CHOUDHARY (ASSISTANT MANAGER) (14607 Points)
Replied 31 July 2012

Dear Ritika,

Refer the Link attached herewith...

Regards,

RAJESH CHOUDHARY

Attached File : 594213 1027752 raj.doc downloaded: 256 times

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CA Mayank Tulsyan (B.Com(H), ACA) (274 Points)
Replied 31 July 2012

Materiality basically means level of misstatements that u can tolerate in any financial statments.

Any misstatement above the level of materiality can effect the Financials. The materiality level is decided at the planning stage by the Senior audit Staffs.

karishma (Audit Intern at Palak Shah & Co) (29 Points)
Replied 31 July 2012

materiality is the importance level of any transaction or any item in the financial statements.say if its salary,its a big expense for any organisation.so it will be disclosed separately.moreover,as an auditor you will also be checking it well given its importance.so the risk of missing any fraud or misstatement in such transactions will be very low.while for immaterial items that are clubbed under miscellaneous,there are high chances that the management may be trying to conceal something in this head.so the level of risk is higher.