1. Does materiality change during the course of an audit? 2. Do all qualitative factors mean that an item is material? 3. what areas in a financial statement would draw high attention in a qualitative materialiality factor?-- Solution 1. The determination of materiality is a matter of professional judgment. In determining the materiality of an item, the auditor considers not only the item’s nature and amount relative to the financial statements, but also the needs of financial statement users. Materiality has to be considered before a detailed audit program can be prepared. In the initial planning, however, an auditor cannot anticipate all of the factors that will ultimately influence the materiality judgment in the evaluation of audit results at the completion of the audit. Therefore, these factors must be considered as they arise, and any change in materiality may be incorpoarated throughout the course of audit. No not all qualitative factors mean that an item is material. These areas draw high attention on qualitative materialaity factor. Matters that affect the organization’s social and legal licence to operate or matters that affect the availability, quality and affordability of the capitals the organization uses or affects (e.g. matters affecting reputation and credibility such as regulatory infringements, sensitive factors like fatalities, pollution, unemployment, negative economic effects)..

1. 1. Does materiality change during the course of an audit?
2. Do all qualitative factors mean that an item is material?
3. what areas in a financial statement would draw high attention in a qualitative materialiality
factor?--
Solution
1. The determination of materiality is a matter of professional judgment. In determining the
materiality of an item, the auditor considers not only the item’s nature and amount relative to the
financial statements, but also the needs of financial statement users.
Materiality has to be considered before a detailed audit program can be prepared. In the initial
planning, however, an auditor cannot anticipate all of the factors that will ultimately influence
the materiality judgment in the evaluation of audit results at the completion of the audit.
Therefore, these factors must be considered as they arise, and any change in materiality may be
incorpoarated throughout the course of audit.
No not all qualitative factors mean that an item is material.
These areas draw high attention on qualitative materialaity factor. Matters that affect the
organization’s social and legal licence to operate or matters that affect the availability, quality
and affordability of the capitals the organization uses or affects (e.g. matters affecting reputation
and credibility such as regulatory infringements, sensitive factors like fatalities, pollution,
unemployment, negative economic effects).