Materiality in Auditing Essay Example | Topics and Well Written Essays - 2000 words - 12

Materiality in Auditing - Essay warningIn the process of analyse planning, the auditor takes the decision as to the level of real(a)ity they will use, report for the entirety of financial statements that will be audited. This imagination is mainly done on the basis of the nature, size, and special circumstances of omissions or misstatements that could influence the financial reports user. Moreover, this judgment is also influenced by open expectations, regulatory requirements, and legislative requirements (Vaujany & Mitev, 2013 p32). This paper seeks to discuss the importance of corporality in the auditing context, as well as to assess the secrecy of materiality levels used by auditors.According to Porter et al (2014 p73), the term material is critically essential in the context of auditing. Materiality definitions in financial reporting are particularly critical to auditors, financial statement preparers, and financial statement users. While only two of these stakeholders ma y be involved in making decisions on materiality, in this case the auditors and the preparers, the definition of materiality in auditing is point more towards the user. The users judgment of decisions on materiality is central to defining materiality, rather than the judgment of the financial statement preparer. Budescu et al (2012 p24) define materiality as one of the fundamental and essential auditing concept, noting that the Auditing and authorization Standard-13 on audit materiality establishes the materiality concepts standards, as well as how it relates with audit risk. A fair and true financial statement and how it is presented will depend on the materiality concept, among opposite things.Keune & Johnstone (2012 p1650) note the relative nature of the materiality concept, arguing that what is material in a specific land site may be immaterial in another circumstance and that consideration and judgment on materiality is a matter for the auditors experience and professional judgment. Thus, the