- This topic has 1 reply, 2 voices, and was last updated 10 months ago by
Kim Smith.
Viewing 2 posts - 1 through 2 (of 2 total)
Viewing 2 posts - 1 through 2 (of 2 total)
- You must be logged in to reply to this topic.
New! Lectures for ACCA AAA September 2022 Exams are now available >>
New! BPP Books for ACCA September 2022 Exams are now available, get your discount code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › Materiality
Hi tutor ,
I want to ask on when do we use materiality to the financial statement as a whole and when do we use the suggested benchmark (rule of thumb) materiality (like 0.5%-1% : revenue)…..?
Thank you
For FS as a whole – when planning – performance materiality is then a lower amount.
Then again for the evaluation of misstatements at the overall review stage (by which time it may be more or less than the “number you first thought of”).
For the FS as a whole does use benchmark(s) that are appropriate in the circumstance e.g. if profit per the draft accounts is very small, you would be over-auditing to set materiality at 10% of profit, say, if that is less than 0.5% of total assets. (Remember IFRS is principally “balance sheet” focused – profit or loss is just the balancing figure/residual for the year.)
For evaluating a misstatement against a relevant benchmark please see this post https://opentuition.com/topic/materiality-calculation-4