Materiality in Auditing Essay Example | Topics and Well Written Essays - 1500 words

Materiality in Auditing - Essay Example Auditing process, as a mechanism of professional reasoning, can be applied in any domain with its objective to identify discrepancies and likewise, report the same to the controlling authorities. It is through this mechanism that may promote corrective measures that are deemed necessary for assuring transparency in the framework. Theoretically explaining, the conceptual understanding of materiality depends largely on the conditions that facilitate accuracy as well as transparency in the financial report presentation. It is thus essential for the auditor to consider possibilities of erroneous financial reporting with the inclusion of a few relatively smaller values that could impose significant effects to the viability of the financial report. Materiality is also regarded as a point of limit and the information should be qualitative to ensure its complete usefulness. Contextually, it should be mentioned that materiality indicates the value considerations emphasized when presenting aud it report, in order to determine whether errors prevail in the accounts, or whether the accounts presented to submit a true interpretation of the financial reports offered. As per Anglo-Saxon accountancy, materiality represents error level as well as helps in understanding and interpreting of financial statements, which will not be significantly affected. On the other side, admissible error level is accepted in order to decide whether accounts are correct or not. With the help of materiality, multinationals have improved its financial statements.