11AU-C 320 Materiality in Planning and Performing an Audit
SCOPE
While AU-C 450 contains guidance on how to use materiality when evaluating the effect of identified misstatements, AU-C 320 offers auditors guidance in using materiality when planning and performing the audit. (AU-C 320-01)
NOTE: The auditor may want to consider the guidance provided in the SEC’s Staff Accounting Bulletin (SAB) 99, Materiality. This SAB addresses the application of materiality thresholds to the preparation and audit of financial statements filed with the SEC and provides guidance on qualitative factors to consider when evaluating materiality.
DEFINITION OF TERM
Source: AU-C 320.09. For the definition related to this standard, see Appendix A, “Definitions of Terms”: Performance materiality.
OBJECTIVE OF AU-C SECTION 320
The objective of the auditor is to apply the concept of materiality appropriately in planning and performing the audit.
(AU-C Section 320.08)
OVERVIEW
The concept of materiality recognizes that some matters are more important for the fair presentation of the financial statements than others. In performing the audit, the auditor is concerned with matters that, individually or in the aggregate, could be material to the financial statements. The auditor’s responsibility is to ...
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