Question: QUESTION TWO ISA 320: Materiality in Planning and Performing an Audit explains the concept of materiality and how it is used by the auditor in

QUESTION TWO

ISA 320: Materiality in Planning and Performing an Audit explains the concept of materiality and how it is used by the auditor in engagement to reach important conclusions regarding procedures and evidence obtained. Concept of materiality is the core concept in risk-based audit approaches. As per ISA 320, the auditor is required to determine materiality in order to reach important conclusions including; assessing risk of material misstatement, designing audit procedure in response to assessed risk and materiality level determined, in estimating the effects undetected misstatements and lastly in forming an audit opinion. An Auditor determines the materiality by exercising his professional judgment. Required: i) Briefly assess Six (6) ways materiality impacts on an audit. 6 Marks

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