Explanation and diffrence in materiality and performance materiality?

This topic has 4 replies, 3 voices, and was last updated 9 years ago by 7122517f.

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June 4, 2016 at 8:58 pm #319452
zaheer10111
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Sir kindly explain the diffrence between materiality ad performance materiality please
June 5, 2016 at 6:37 am #319485
Ken Garrett
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This is covered in the notes and lectures (chapter 5).
June 14, 2016 at 2:27 am #322847
7122517f
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Ken,In the audit report we need to calculate materiality,So, Do we need to calculate materiality for two items/balances or calculating materiality for one item/balance is enough to achieve one mark…????
June 14, 2016 at 8:57 am #322861
Ken Garrett
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You don’t need to calculate materiality for inclusion in the audit report. However, in deciding what type of report to give you have to take materiality into account.

If the question tells you operating profit, turnover and total assets then it is expecting you to work out the three estimates of preliminary materiality. Probably 1 1/2 – 2 marks going for the three of those.
June 14, 2016 at 9:21 am #322863
7122517f
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Oh thanks for correcting me cause I thought it would be fine enough to calculate 1 materiality item for achieving one mark…… Even there isn’t any conclusion on marks scheme as well regarding the mark allocation of calculation of materiality
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