Audit Planning & Materiality

One-minute revision

• Overall materiality → performance materiality (lower, buffers aggregation risk) → clearly trivial (don't accumulate)
• Benchmarks: pre-tax income, revenue, total assets — chosen for the entity
• Materiality is quantitative and qualitative (turns loss into profit, covenant breach, illegal act)
• Revise materiality if actual results differ significantly from planning estimates
• Strategy = scope/timing/direction; Plan = nature/timing/extent of specific procedures