Thursday 16 November 2023


2:30 pm


1.5 CPD Hours

Session Topic

Understanding materiality in the context of financial-statements audits

Materiality is first and foremost a financial-reporting, rather than an auditing, concept. It isn’t defined in ASA 320 Materiality in Planning and Performing an Audit.

An auditor’s determination of materiality is a matter of professional judgement. It must be appropriately applied in planning, performing, and the evaluation of misstatements.

If materiality levels are set too high, auditors may not perform sufficient procedures to detect misstatements. Conversely, if set too low, auditors might perform more work than necessary.

Auditing standard-setters have refrained from giving quantitative guidance on the calculation of materiality. But there are some rules of the road and generally accepted benchmarks.

This session will:

  • Explain the materiality concept in the context of an audit
  • Recap the application of materiality in audit planning
  • Explain how to determine overall materiality and when it should be applied to specific classes of transactions, balances, and disclosures
  • Identify how to set materiality thresholds for profit-seeking, not-for-profits, start-ups, public-sector entities, less complex and loss-making entities, and first-time audits
  • Describe how to apply performance materiality
  • Detail when and how to revise materiality assessments
  • Explain materiality in the context of a group audit (ASA 600)
  • Address how to evaluate misstatements identified during an audit (ASA 450), and
  • Identify what to document and what should be in your audit policy.
$360.00 Buy GAAPinar
Book 4 GAAPinars & get one free

This session is presented by:

Colin Parker

Principal | GAAP Consulting | Financial Reporting Expert

Colin, Principal of GAAP Consulting, is an expert in financial reporting, auditing and related governance issues, and was previously a member of the Australian Accounting Standards Board.

He has conducted many independent expert and consulting experts reports on professional negligence, and accounting and auditing standards. He is the team leader advisory and litigation services and adviser to GAAP Training and Reportfraud.


Chanelle Pienaar

Principal | Audit Assist

Chanelle is an accomplished Chartered Accountant with more than 20 years’ experience as an auditor in a wide variety of Financial Audit and Audit Quality Control projects. Chanelle has abroad range of experience covering Financial Statement Audits, Audit Quality Control Reviews, Trust Account Audits and AASB implementation Advice & Assistance.

Chanelle has strong technical knowledge and enthusiastic training style ensures that all participants, from the graduate to the partner, receive maximum value from each training session.