What is Audit Materiality?
Audit Materiality The quantitative or qualitative threshold in an audit below which misstatements are considered not to affect the fair presentation of financial statements, as determined by the auditor according to professional standards.
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Audit Materiality” Used in Practice?
Audit materiality is set at a level where individual or aggregate misstatements would not influence users’ decisions.
Certification Exam Relevance
Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Audit Materiality?
The quantitative or qualitative threshold in an audit below which misstatements are considered not to affect the fair presentation of financial statements, as determined by the auditor according to professional standards.
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