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How to understand performance materiality ? ( P7)

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How to understand performance materiality ? ( P7)

How to understand performance materiality ? ( P7)

February 8th 2016 AN ACCA USER 130 Points
Recategorized February 10th 2016 AN ACCA USER

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Performance materiality means the amount or amounts set by the auditor at less than materiality for the financial statements as a whole to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the financial statements as a whole.

If applicable, performance materiality also refers to the amount or amounts set by the auditor at less than the materiality level or levels for particular classes of transactions, account balances or disclosures.

If, in the specific circumstances of the entity, there is one or more particular classes of transactions, account balances or disclosures for which
misstatements of lesser amounts than materiality for the financial statements as a whole could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements, the auditor shall also determine the materiality level or levels to be applied to those particular classes of transactions, account balances or disclosures.

February 9th 2016 AN ACCA USER 8,190 Points
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