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Hi Mike
Can you explain the diffrence between a material and a pervasive matter? I have read the technical article “Matter of Opinion’ as well the ISA 705, but i am still a bit confused as to what exactly is the difference.
Thanks.
Whether matters are pervasive or merely material comes down to a question of the individual auditor’s assessment
I believe that I do explain the difference within the P7 lectures but try this
Imagine a piece of A4 paper with a small triangle cut out of the top left corner
That piece if paper represents “truth and fairness”
If the triangle is the only matter that the auditors have found, it is material, but it’s still the only thing wrong with the financial statements, then that’s material and not pervasive
Now, still with or piece of A4 paper. Imagine that that small triangle from the top left corner is the only thing within the financial statements that is correct. Everything else is iffy (or plain wrong)
That’s pervasive
Somewhere in the middle material turns to pervasive … but there’s no defined point / line / value where this metamorphosis occurs. It’s in the mind / assessment of the reporting auditor
Does that make it easier for you?
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