Home / CPA Course / AUD

Materiality and performance materiality

AUD Chapter 14 · Area II · Blueprint II.D

Materiality decides how hard the auditor looks and what counts as a problem. The Blueprint asks you to calculate it, at the statement level and for particular accounts, and to determine performance materiality. This is one of the most calculation-friendly chapters in AUD.

In this chapter

1. What material means
2. Calculating materiality for the statements as a whole
3. Choosing the benchmark
4. Qualitative factors: when a small amount is material
5. Lower materiality for particular items
6. Performance materiality and tolerable misstatement
7. Materiality in a group audit
8. Materiality is revised as the audit goes on

This chapter has 8 lessons, 50 practice MCQs with explanations and 10 simulations, plus flashcards and a recall sheet.

What this chapter covers

• Materiality for the statements as a whole
• qualitative factors
• benchmarks
• lower levels for particular items
• performance materiality and tolerable misstatement

Chapter 13: Service organizations, control limits and management override · Chapter 15: Assessing and responding to the risk of material misstatement