Materiality Flashcards
(3 cards)
1
Q
what is materiality?
A
its about where a misstatement in the financial statements is big enough to influence the decisions of users
2
Q
what the common benchmarks?
A
revenue: 0.5% - 1%
total assets: 1% - 2%
profit before tax: 5% - 10%
3
Q
what are the audit risk levels with their respective %?
A
low risk: 75% - 85%
medium risk: 65% - 75%
high risk: 50% - 65%
