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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › Forensic auditing
Hi sir,
I am wondering what does zero of materiality in forensic auditing mean.
Thanks
Hi sir,
I am wondering whether it means zero tolerance versus materiality.
Materiality is where there is a significant or sufficient risk so for example checking for a difference of at least 5% in circumstances of stock is material to know.
But with zero tolerance for example if a director of a company is found to steal $500 although this might be well below the 5% level, it is significant.
Forensic audit work (in fact, any forensic work) is specifically checking for errors and an error is an error whether it’s $100,000,000 or $1 – it’s an error
So the concept of materiality and ‘near enough’ doesn’t apply to forensic work
OK?