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Auditing risk, materiality & judgement standards: an international comparison

Article Abstract:

A study of the policies of various professional audit bodies responsible for auditing standards in English speaking Pacific Rim nations and the UK regarding audit risk, materiality and judgement indicates that these bodies do not place an emphasis on the three concepts. Thus, their auditing standards on these three concepts tend to focus on methodological issues rather than questions of 'why' or 'how much.' It is recommended that the auditing bodies in the countries included in this study should adopt a conceptual auditing framework to better inform the standard-setting process.

United Kingdom, Pacific Rim

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The relationship between materiality thresholds and judgements of fraud risk

Article Abstract:

A simulated audit study was given to 494 practicing auditors/managers from five Big Six auditing firms in nine US states based on a real-life audit where material fraud was not detected by auditors. Empirical evidence collected in the study from 152 practicing auditors who are managers in their firms indicated that audit judgments concerning materiality are not uniform in the absence of quantitative methods in auditing standards for materiality thresholds.

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Materiality and risk judgements: a review of users' expectations

Article Abstract:

It has been suggested that materiality and risk judgements are indispensable to auditing and financial reporting especially statements such as audit reports or directors' statements. If materiality thresholds and standards used by financial statement preparers and auditors were to be required to be disclosed in financial reports, it may reduce the audit expectations gap between the auditors' performance and audit quality and the public perception of it.

Practice, Financial statements

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