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Dear Sir,
What is Performance Materiality? Can you explain as I dont understand it sir.
Likewise, why does notes say Low perf. materiality will result in larger sample size.
Thanks in Advance sir.
If you put “performance materiality” into the search feature you will find various similar posts – for example this one https://opentuition.com/topic/performance-materiality-11 explains why performance materiality is lower than overall materiality.
Lower materiality corresponds to large sample sizes is just “commonsense”. Think about what it means in terms of $s. For example, if performance materiality if $100k and I tell you to examine all items in a population > $100k you might tell me that you have examined 12 items.
If I then say – sorry – I meant $10,000 – will you be examining more or less than 12 items?
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