Component performance materiality
Component performance materiality is an amount set for work on a component to reduce aggregation risk to an appropriately low level. The group engagement team considers the component’s circumstances and the planned work. It need not be a simple mechanical allocation whose amounts add to group materiality.
Worked example
A group auditor sets a component-specific threshold below group materiality and asks the component auditor to design work to that threshold.
Common mistake
Do not assume a component’s threshold is automatically group materiality divided equally among subsidiaries.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AAA (INT) | Direct | September 2026–June 2027 |