1. Profile photo of usmankhattak0001 says

    Materiality, An auditor should have skills of professional judgement that he/she can set the points of materiality. Because every organisation is not of the same type. So it all depends on Inherent & control risk of an entity & depends on the nature & type of an entity.

    • Profile photo of Mahoysam says

      It means that if auditors think there is high risk in this entity, they will set a lower level of materiality! Why? Because materiality is the level which you have to investigate any errors above it, if materiality is 5000 and there is a misstatement of 6000, then you have to investigate that as it goes above materiality, having said that, if you think about it, the lower the level of the materiality the more work you will have to do and the more investigations you will carry on because many errors will easily exceed the level of materiality as it is of a lower level, which does make sense that you should investigate more in the case of anticipating high risk.

      Hope that helped!


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