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MaterialityISA 320 Audit Materiality
uMateriality     u
u      MaterialitySize & Nature in given circumstances                 u
u      MaterialitySize & Nature in given circumstances       Auditor Judgement                 u
u           Materiality                                 tettet Guidelines NO rules       Relative                       u
uMaterialityThresholds              b     u              b
uMaterialityThresholds Vary firm to firm   b       u                   b
uMaterialityThresholds Vary firm to firm   b     Ranges       u                   b
uMaterialityThresholds Vary firm to firm       b                 1-2% Revenue     Ranges       u                      b
uMaterialityThresholds Vary firm to firm       b                 1-2% Revenue     Ranges       5-10% PBT        u           ...
uMaterialityThresholds Vary firm to firm       b                 1-2% Revenue     Ranges       5-10% PBT        u        5-1...
u      MaterialitySize & Nature in given circumstances                 u
u          Materiality    Size & Nature in given circumstancesThe more subjective the more flexible on              materia...
u      MaterialitySize & Nature in given circumstances                 u
u         Materiality   Size & Nature in given circumstancesSignificance of item? (Directors bonus)                    u
u      MaterialitySize & Nature in given circumstances                 u
u           Materiality     Size & Nature in given circumstancesImpact on FS (turns profit to loss? or alters              ...
uMateriality     u
uMateriality   Planning      u
u         Materiality                PlanningMateriality Thresholds for FS as a whole                   u
uMateriality     u
uMateriality  Performance      u
u          Materiality              PerformanceImmaterial errors added together problem                   u
u          Materiality              PerformanceImmaterial errors added together problem     Lower than overall materiality...
u          Materiality              PerformanceImmaterial errors added together problem     Lower than overall materiality...
u          Materiality              PerformanceImmaterial errors added together problem     Lower than overall materiality...
BUSINESS RISKSChanges in regulations, demand etc
BUSINESS RISKS  Changes in regulations       Interest Rates         Employees   Failure to modernise     Fashion / trends ...
PILOT PAPER   Q1 a
December 10   Q1 a
June 09 Q1 a
BUSINESSUnderstanding
BUSINESSUnderstanding Discuss with Management
BUSINESSUnderstanding Discuss with Management     Discuss IC with IA
BUSINESSUnderstanding  Discuss with Management       Discuss IC with IAAnalytical Procedures (ISA 520)
BUSINESSUnderstanding  Discuss with Management       Discuss IC with IAAnalytical Procedures (ISA 520)   Observation (visi...
BUSINESS Understanding     Discuss with Management          Discuss IC with IA   Analytical Procedures (ISA 520)       Obs...
BUSINESS Understanding     Discuss with Management          Discuss IC with IA   Analytical Procedures (ISA 520)       Obs...
BUSINESSUnderstanding   (ISA
BUSINESSUnderstanding             (ISA    1. External Factors
BUSINESSUnderstanding                   (ISA       1. External Factors2. Company Structure & A/C Policies
BUSINESSUnderstanding                   (ISA        1. External Factors2. Company Structure & A/C Policies      3. Objecti...
BUSINESSUnderstanding                     (ISA           1. External Factors   2. Company Structure & A/C Policies        ...
BUSINESSUnderstanding                     (ISA           1. External Factors   2. Company Structure & A/C Policies        ...
BUSINESSUnderstanding                     (ISA           1. External Factors   2. Company Structure & A/C Policies        ...
June 09 Q1 a
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Materiality & business risks p7

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  • Transcript of "Materiality & business risks p7"

    1. 1. MaterialityISA 320 Audit Materiality
    2. 2. uMateriality u
    3. 3. u MaterialitySize & Nature in given circumstances u
    4. 4. u MaterialitySize & Nature in given circumstances Auditor Judgement u
    5. 5. u Materiality tettet Guidelines NO rules Relative u
    6. 6. uMaterialityThresholds b u b
    7. 7. uMaterialityThresholds Vary firm to firm b u b
    8. 8. uMaterialityThresholds Vary firm to firm b Ranges u b
    9. 9. uMaterialityThresholds Vary firm to firm b 1-2% Revenue Ranges u b
    10. 10. uMaterialityThresholds Vary firm to firm b 1-2% Revenue Ranges 5-10% PBT u b
    11. 11. uMaterialityThresholds Vary firm to firm b 1-2% Revenue Ranges 5-10% PBT u 5-10% Assets b
    12. 12. u MaterialitySize & Nature in given circumstances u
    13. 13. u Materiality Size & Nature in given circumstancesThe more subjective the more flexible on materiality u
    14. 14. u MaterialitySize & Nature in given circumstances u
    15. 15. u Materiality Size & Nature in given circumstancesSignificance of item? (Directors bonus) u
    16. 16. u MaterialitySize & Nature in given circumstances u
    17. 17. u Materiality Size & Nature in given circumstancesImpact on FS (turns profit to loss? or alters trends) u
    18. 18. uMateriality u
    19. 19. uMateriality Planning u
    20. 20. u Materiality PlanningMateriality Thresholds for FS as a whole u
    21. 21. uMateriality u
    22. 22. uMateriality Performance u
    23. 23. u Materiality PerformanceImmaterial errors added together problem u
    24. 24. u Materiality PerformanceImmaterial errors added together problem Lower than overall materiality u
    25. 25. u Materiality PerformanceImmaterial errors added together problem Lower than overall materiality Can vary from area to area u
    26. 26. u Materiality PerformanceImmaterial errors added together problem Lower than overall materiality Can vary from area to area Revise as audit progresses u
    27. 27. BUSINESS RISKSChanges in regulations, demand etc
    28. 28. BUSINESS RISKS Changes in regulations Interest Rates Employees Failure to modernise Fashion / trends CEO reliance Price wars Gearing
    29. 29. PILOT PAPER Q1 a
    30. 30. December 10 Q1 a
    31. 31. June 09 Q1 a
    32. 32. BUSINESSUnderstanding
    33. 33. BUSINESSUnderstanding Discuss with Management
    34. 34. BUSINESSUnderstanding Discuss with Management Discuss IC with IA
    35. 35. BUSINESSUnderstanding Discuss with Management Discuss IC with IAAnalytical Procedures (ISA 520)
    36. 36. BUSINESSUnderstanding Discuss with Management Discuss IC with IAAnalytical Procedures (ISA 520) Observation (visits etc)
    37. 37. BUSINESS Understanding Discuss with Management Discuss IC with IA Analytical Procedures (ISA 520) Observation (visits etc)Inspection (manuals, plans & reports)
    38. 38. BUSINESS Understanding Discuss with Management Discuss IC with IA Analytical Procedures (ISA 520) Observation (visits etc)Inspection (manuals, plans & reports)
    39. 39. BUSINESSUnderstanding (ISA
    40. 40. BUSINESSUnderstanding (ISA 1. External Factors
    41. 41. BUSINESSUnderstanding (ISA 1. External Factors2. Company Structure & A/C Policies
    42. 42. BUSINESSUnderstanding (ISA 1. External Factors2. Company Structure & A/C Policies 3. Objectives and Risks
    43. 43. BUSINESSUnderstanding (ISA 1. External Factors 2. Company Structure & A/C Policies 3. Objectives and Risks4. Measurement of Performance (KPIs etc)
    44. 44. BUSINESSUnderstanding (ISA 1. External Factors 2. Company Structure & A/C Policies 3. Objectives and Risks4. Measurement of Performance (KPIs etc) 5. Internal Control
    45. 45. BUSINESSUnderstanding (ISA 1. External Factors 2. Company Structure & A/C Policies 3. Objectives and Risks4. Measurement of Performance (KPIs etc) 5. Internal Control
    46. 46. June 09 Q1 a
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