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Chapter 9

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Created by:

wellington33  on July 26, 2011

Subjects:

auditing

Description:

Materiality and Risk

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Chapter 9

Materiality
The magnitude of an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgement of a reasonable person relying on the information would have changed or influenced by the omission or misstatement.
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3 terms

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Materiality The magnitude of an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgement of a reasonable person relying on the information would have changed or influenced by the omission or misstatement.
control risk measures the auditor's assessment of the likelihood that there are material misstatements (errors or fraud) in a segment before considering the of internal control.
formula IR X CR/AAR = W

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