ICAEW publishes guidance on applying materiality requirements in ISA audits
27 Jun, 2017
The Institute of Chartered Accountants in England and Wales (ICAEW) has published a practical guide for auditors who are applying the materiality requirements in International Standards on Auditing (ISAs) on audits.
The ICAEW indicates that the guide, is relevant to firms of all sizes but will be of particular help “to smaller firms, including sole practitioners and those firms with a few audit engagement partners”. It is also intended to be relevant to all jurisdictions where ISAs are applied but, as it does not address any specific local requirements that jurisdictions might have in place, where these exist the ICAEW notes that the guide should be read in conjunction with those local requirements.
The guidance covers:
- what is materiality and why is it important?;
- determining materiality;
- applying materiality to the evaluation of identified misstatements;
- materiality in group audits;
- communications with management and those charged with governance; and
- documentation.
The ICAEW comments that “it is clear that addressing the materiality requirements in ISAs presents real practical challenges for audit firms of all sizes and is an area where improvement can be made”.
The guidance is available on the ICAEW website.
