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audit opinion

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › audit opinion

  • This topic has 5 replies, 2 voices, and was last updated 2 years ago by Kim Smith.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • March 11, 2023 at 3:19 pm #681114
    Frooti
    Participant
    • Topics: 92
    • Replies: 83
    • ☆☆

    If something falls within 5% to 10% of profit before tax , then how do you determine if it’s material or not for audit opinion questions as we dont’ have any set materiality?
    what would materiality levels for following
    5% –
    7%-
    10%-

    March 11, 2023 at 7:59 pm #681156
    Kim Smith
    Keymaster
    • Topics: 132
    • Replies: 8266
    • ☆☆☆☆☆

    Less than 5% is not material.
    Greater than 10% is material.
    Inbetwee is a matter of professional judgement in the circumstances.

    March 12, 2023 at 2:34 am #681166
    Frooti
    Participant
    • Topics: 92
    • Replies: 83
    • ☆☆

    so what shall i say for 7% material or not?

    March 12, 2023 at 7:49 am #681172
    Kim Smith
    Keymaster
    • Topics: 132
    • Replies: 8266
    • ☆☆☆☆☆

    There is no one correct answer, you have to judge and justify in the circumstances depending on what the misstatement is. For example, you might consider that a 7% understatement of profit is not “as bad” as a 7% overstatement. Or you might think anything more 5% is material.

    March 13, 2023 at 7:46 am #681208
    Frooti
    Participant
    • Topics: 92
    • Replies: 83
    • ☆☆

    Thank you so much maam for all your help 🙂

    March 13, 2023 at 11:23 am #681227
    Kim Smith
    Keymaster
    • Topics: 132
    • Replies: 8266
    • ☆☆☆☆☆

    You’re welcome!

  • Author
    Posts
Viewing 6 posts - 1 through 6 (of 6 total)
  • The topic ‘audit opinion’ is closed to new replies.

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