Description
The concept of materiality has received a lot of attention in recent years as high profile accounting scandals have plagued financial reporting. Auditing Standards from the PCAOB and the AICPA require that early in an audit engagement the auditor establish a preliminary level of materiality. This preliminary level of materiality, a dollar value, is used to determine the extent of audit testing that is performed. It can be changed as the audit progresses and key financial statement numbers change. Under current standards neither the preliminary nor final materiality number is disclosed. They are known only to the auditor. This paper examines the reasons why the materiality level is so carefully concealed. It is also suggests the benefits that would accrue to users of the financial statements if the auditor's materiality level were disclosed in the auditor's report.
Date of creation, presentation, or exhibit
2007
Document Type
Conference Paper
Department, Program, or Center
Accounting (SCB)
Recommended Citation
Kearns, Francis E., "Materiality & the audit report: It's time for disclosure" (2007). Accessed from
https://repository.rit.edu/other/640
Campus
RIT – Main Campus
Comments
Materiality and the Audit Report" , Northeast Regional Meeting, American Accounting Association,, 2007 Note: imported from RIT’s Digital Media Library running on DSpace to RIT Scholar Works in February 2014.