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Hi there,
I have a question in relation to audit materiality. I understand there are 3 levels of materiality such as:
– Materiality;
– Performance Materiality;
– % of PM
– Specific MaterialityI have confusion when to use specific materiality or performance mat or % of performance mat when there is variance or misstatement.
I request if someone can explain with example.
Thanks.
You will have to give me an example where you are seeing “specific materiality” – I am not aware of this as a term, and I don’t know what you mean by “% of PM” as a “level”.
There are two levels relevant to AA “materiality” (meaning for the financial statements as a whole) and “performance materiality” (see page 35 of the notes).
There is also a term “component materiality” – but this is relevant only in the audit of groups so not examinable in AA.
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