Auditors perform audits so as to give reasonable assurance that the financial statements of the entity show a true and fair view. Financial statements of the entity are said to show a true and fair view if, after collecting sufficient and appropriate audit evidence, the auditor concludes that financial statements do not contain material misstatement.
materiality in auditing
Performance materiality means the amount set by auditor at less than materiality for the financial statement as whole, to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatement exceeds materiality for the financial statement as whole.
Performance materiality can be set for financial statement as whole or for class of transaction, account balance … Read the rest