Audit materiality : a comparative analysis between normative principles and professional standards
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Date
Authors
Botha, W.J.J. (Willem Johannes Jacobus)
Journal Title
Journal ISSN
Volume Title
Publisher
Southern African Institute of Government Auditors
Abstract
Audit materiality is a fundamental concept of the external audit process. Guidelines issued by professional standard-setting bodies generally state that the determination of audit materiality is primarily a matter of professional judgement. Over emphasizing professional judgement as predominate guideline might be an attempt to advance and maintain so-called uncertain professional knowledge. This paper examines the proposition that in respect of determining materiality during the audit of company annual financial statements, professional auditing standards suggest the preference of standard-setting bodies not to provide concrete guidelines to the extent it is possible. It does so by means of a comparative analysis between normative principles regarding the determination of audit materiality and the corresponding professional standards. The results provide sufficient evidence to support the research proposition. Audit materiality standards presently have two major shortcomings, namely: over emphasizing the exercise of professional judgement and providing for various alternatives, while normative principles favour a specific approach.
Description
Keywords
Audit materiality, Auditing standards, Standard-setting process, Normative principles, Professional judgement, External audit, Audit process
Sustainable Development Goals
Citation
Botha, WJJ 1999, 'Audit materiality : a comparative analysis between normative principles and professional standards', Southern African Journal of Accountability and Auditing Research, vol. 2, pp. 31-54. [http://www.saiga.co.za/publications-sajaar.htm]