CAS 320, Materiality in Planning and Performing an Audit

Ef­fec­tive date:

Effective for audits of financial statements for periods ending on or after December 14, 2010.

[Canadian Auditing Standard (CAS) 320, Materiality in Planning and Performing an Audit, should be read in conjunction with CAS 200, Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Canadian Auditing Standards.]


This Canadian Auditing Standard (CAS) deals with the auditor's responsibility to apply the concept of materiality in planning and performing an audit of financial statements. CAS 450 Evaluation of Misstatements Identified during the Audit, explains how materiality is applied in evaluating the effect of identified misstatements on the audit and of uncorrected misstatements, if any, on the financial statements.

The auditor's determination of materiality is a matter of professional judgment, and is affected by the auditor's perception of the financial information needs of users of the financial statements. In this context, it is reasonable for the auditor to assume that users:

  1. have a reasonable knowledge of business and economic activities and accounting and a willingness to study the information in the financial statements with reasonable diligence;
  2. understand that financial statements are prepared, presented and audited to levels of materiality;
  3. recognize the uncertainties inherent in the measurement of amounts based on the use of estimates, judgment and the consideration of future events; and
  4. make reasonable economic decisions on the basis of the information in the financial statements.

His­tory of CAS 320

There have been no amendments to CAS 320 since its date of issue.

Note: Our history summary does not take into account consequential amendments made as the result of other projects.

Amendments under consideration

  • None

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.