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hello dear tutor
previously we were not required to mention materiality in audit report question by ISA (ie appraisal).
In the ACCA new article about report there is no indication about that.
According to new standard do we need to say the materiality in Audit report appraisal question?? I saw some UK company auditor are showing materiality in the annual report (ie BP, Tesco).
So what should we do??
Thank you.That’s a new one on me!
Are you saying that the auditors are specifying their materiality levels to which they are working?
Wow!
hi sir
Yes sir. Can you ensure me about the matter?? whether to put the materiality level or not in the audit report and in the appraisal question have to mention or not? i can give you a snapshot of bp 2015 audit report but don’t know how to post here.
thank you.Well!!! That was an interesting read! I googled the BP financial statements and trawled through nearly 100 pages before I found the auditors’ report
You’re correct (I never doubted you) and EY have detailed their materiality levels within their report
It certainly makes the report clearer for the informed reader although I’m not sure what “Everyman’s” reaction will be to the statement …
“We determined materiality for the group to be $0.5 billion (2014 $1 billion), which is 5.7% (2014 5%) of underlying replacement cost profit (as defined on page 258) before interest and taxation”
To get back to your question, if there is a question asking you about audit reports, it’s highly improbable that you will be expected to write one out
You MAY be expected to comment on a report written by the examiner in the exam
It’s more likely that you will be asked about KAMs and the new format
OK?
For anyone who may be interested, here’s the link to BP audit report, page 96 and following:
https://www.bp.com/content/dam/bp/pdf/investors/bp-annual-report-and-form-20f-2015.pdf
hi sir
firstly thank you sir
i understand your explanation sir but i am not clear one thing about report appraisal question. in june 2014 Q5 there was a materiality issue and the examiner’s answer was there was, there is no requirement about materiality by ISA. That was previous std. But if same types of question came now how we should take approach?? (ie according to revised std we should show the materiality level or just like past answer no need?)
thank you.Like the past answer, no need.
I can only imagine that EY have disclosed materiality in an effort to make the BP financial statements more understandable for the reader
To that end, I find it laudable
But I don’t see it anywhere in Standards just yet
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