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