Materiality is an important audit concept because audits must be designed to detect "material" misstatements.

Required

a. Define materiality and describe how it is used in both accounting and auditing.

b. Should the determination of the materiality be discussed with

(i) The audit committee and

(ii) Management before the beginning of the audit engagement? Explain your rationale.

c. What factors might an auditor look at in determining materiality for an audit client prior to the start of the audit?