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Forensic auditing

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › Forensic auditing

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  • September 30, 2017 at 9:42 pm #409101
    mileyshanna
    Member
    • Topics: 45
    • Replies: 30
    • ☆☆

    Hi sir,
    I am wondering what does zero of materiality in forensic auditing mean.
    Thanks

    September 30, 2017 at 9:50 pm #409102
    mileyshanna
    Member
    • Topics: 45
    • Replies: 30
    • ☆☆

    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.

    October 1, 2017 at 5:39 pm #409142
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23310
    • ☆☆☆☆☆

    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?

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