Materiality in Auditing

Project description

Assignment Title

The title to be used when submitting this assignment is Materiality in Auditing.

Assignment Question

The term material is of critical importance in the auditing context (Porter et al., 2014, p.73).

Materiality levels are more secret than the Coca Cola formula (Mock et al., 2009, p.4).

Discuss these abstracts in the context of academic research and recent developments in audit regulation and practice.

Assignment Guidance

The aim of this assignment is to assess your ability to construct a sustained academic argument around a key concept in auditing in the light of recent developments.

The following questions may aid in researching, planning and writing your essay:

Is materiality of critical importance in auditing? If so, why?

Have the materiality levels used by auditors been secret? If so, why?

What has academic research shown about the importance and secrecy of materiality?

How has recent audit regulation, particularly in relation to audit reporting, changed audit practice in relation to the disclosure of materiality?

Is it possible to conclude whether or not this change is for the better?

This is an academic essay. It will require a brief introduction, a clear conclusion, an appropriate bibliography, and referencing in the Harvard style. You should support your argument by at least one recent example from an audit report.

Do not copy material from any sources for your answer to this question without quotation marks or appropriate referencing as this constitutes plagiarism.

Guide to Sources

Our first tutorial will consist of a briefing on this assignment. Themes relevant to this essay will be touched upon in our first seven lectures on the auditing module and in our third tutorial.

A starting point for your independent research in this area could be any good recent auditing text book. An appropriate source would be the relevant sections in our course text: Porter, B. et al. (2014) Principles of External Auditing (4th ed.), pp. 73-77, 350-361.

The full text of the current International Standard on Auditing ISA 320 Materiality in Planning and Performing an Audit can be accessed on the website of the International Federation of Accountants (IFAC) at https://www.ifac.org/sites/default/files/publications/files/A018%202013%20IAASB%20Handbook%20ISA%20320.pdf.

The IFAC website also contains the research report from which the second abstract in the essay question is taken, Mock, T. et al. (2009) The Unqualified Auditors Report: A Study of User Perceptions, Effects on User Decisions and Decision Processes, and Directions for Further Research, at http://www.ifac.org/sites/default/files/downloads/Study__1_ASB_Summary_Report.pdf.

A review of academic research on materiality to 2005, Messier, W. et al. (2005), A Review and Integration of Empirical Research on Materiality: Two Decades Later, can be accessed at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=786688.

A review of current audit practice in relation to materiality in the UK can be found in the recent Financial Reporting Council (FRC) publication, FRC (2013), Audit Quality Thematic Review Materiality, available at

https://frc.org.uk/Our-Work/Publications/Audit-Quality-Review/Audit-Quality-Thematic-Review-Materiality.pdf.

This document also provides brief coverage of the recent changes to audit reporting in the UK.

The FRC website provides a generic example of the revised audit report now used in the UK at

https://www.frc.org.uk/Our-Work/Publications/Audit-and-Assurance-Team/ISA-700-%28UK-and-Ireland%29-700-%28Revised%29/Illustrative-example-of-a-UK-auditor-s-report.aspx.

Examples of such audit reports can also be found in the annual reports of UK companies for years ended from 30 September 2013 onwards. An example can be accessed at

http://www.tescoplc.com/files/pdf/reports/ar14/download_annual_report.pdf, pp.65-68.

You may, of course, also wish to explore other authoritative sources in writing your essay.

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Your email address will not be published. Required fields are marked *

Materiality in Auditing

Project description

Assignment Title

The title to be used when submitting this assignment is Materiality in Auditing.

Assignment Question

The term material is of critical importance in the auditing context (Porter et al., 2014, p.73).

Materiality levels are more secret than the Coca Cola formula (Mock et al., 2009, p.4).

Discuss these abstracts in the context of academic research and recent developments in audit regulation and practice.

Assignment Guidance

The aim of this assignment is to assess your ability to construct a sustained academic argument around a key concept in auditing in the light of recent developments.

The following questions may aid in researching, planning and writing your essay:

Is materiality of critical importance in auditing? If so, why?

Have the materiality levels used by auditors been secret? If so, why?

What has academic research shown about the importance and secrecy of materiality?

How has recent audit regulation, particularly in relation to audit reporting, changed audit practice in relation to the disclosure of materiality?

Is it possible to conclude whether or not this change is for the better?

This is an academic essay. It will require a brief introduction, a clear conclusion, an appropriate bibliography, and referencing in the Harvard style. You should support your argument by at least one recent example from an audit report.

Do not copy material from any sources for your answer to this question without quotation marks or appropriate referencing as this constitutes plagiarism.

Guide to Sources

Our first tutorial will consist of a briefing on this assignment. Themes relevant to this essay will be touched upon in our first seven lectures on the auditing module and in our third tutorial.

A starting point for your independent research in this area could be any good recent auditing text book. An appropriate source would be the relevant sections in our course text: Porter, B. et al. (2014) Principles of External Auditing (4th ed.), pp. 73-77, 350-361.

The full text of the current International Standard on Auditing ISA 320 Materiality in Planning and Performing an Audit can be accessed on the website of the International Federation of Accountants (IFAC) at https://www.ifac.org/sites/default/files/publications/files/A018%202013%20IAASB%20Handbook%20ISA%20320.pdf.

The IFAC website also contains the research report from which the second abstract in the essay question is taken, Mock, T. et al. (2009) The Unqualified Auditors Report: A Study of User Perceptions, Effects on User Decisions and Decision Processes, and Directions for Further Research, at http://www.ifac.org/sites/default/files/downloads/Study__1_ASB_Summary_Report.pdf.

A review of academic research on materiality to 2005, Messier, W. et al. (2005), A Review and Integration of Empirical Research on Materiality: Two Decades Later, can be accessed at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=786688.

A review of current audit practice in relation to materiality in the UK can be found in the recent Financial Reporting Council (FRC) publication, FRC (2013), Audit Quality Thematic Review Materiality, available at

https://frc.org.uk/Our-Work/Publications/Audit-Quality-Review/Audit-Quality-Thematic-Review-Materiality.pdf.

This document also provides brief coverage of the recent changes to audit reporting in the UK.

The FRC website provides a generic example of the revised audit report now used in the UK at

https://www.frc.org.uk/Our-Work/Publications/Audit-and-Assurance-Team/ISA-700-%28UK-and-Ireland%29-700-%28Revised%29/Illustrative-example-of-a-UK-auditor-s-report.aspx.

Examples of such audit reports can also be found in the annual reports of UK companies for years ended from 30 September 2013 onwards. An example can be accessed at

http://www.tescoplc.com/files/pdf/reports/ar14/download_annual_report.pdf, pp.65-68.

You may, of course, also wish to explore other authoritative sources in writing your essay.

Leave a Reply

Your email address will not be published. Required fields are marked *