Given time and cost constraints of an audit, explain how materiality and audit risk are assessed and applied to make an audit efficient and effective.© BrainMass Inc. brainmass.com June 4, 2020, 12:45 am ad1c9bdddf
Given time and cost constraints of an audit, explain how materiality and audit risk are assessed and applied to make an audit efficient and effective.
Materiality is that in relationship to information, the information which if excluded, or misstated can adversely affect decisions about the allocation of resources made by users of financial report or in the discharge of accountability by the management or the governing body. When considering materiality the auditor needs to consider the reliability of management information and factors which may consider the deviations from normal activities. To ...
Materiality and audit risk is discussed very comprehensively in this explanation.