12-10-2009, 07:09 PM
Salam to all,
I m a student of Mod D and have some problem with <b>ISA 320</b>, Audit Materiality.
I cant understand the relationship between Audit Risk and Materiality Level. As per my view, if materiality level increases, detection risk should go down and less procedures are required and ultimately result in high audit risk. but in ISA the relation b/s Audit risk and materiality is inverse, i.e. <i>increase in Audit Risk results in decrease in Materiality level</i>. <b>(Paragraph # 10 of ISA 320)</b>.
<u>Please explain me this para.</u>
Regards, waiting for reply.
I m a student of Mod D and have some problem with <b>ISA 320</b>, Audit Materiality.
I cant understand the relationship between Audit Risk and Materiality Level. As per my view, if materiality level increases, detection risk should go down and less procedures are required and ultimately result in high audit risk. but in ISA the relation b/s Audit risk and materiality is inverse, i.e. <i>increase in Audit Risk results in decrease in Materiality level</i>. <b>(Paragraph # 10 of ISA 320)</b>.
<u>Please explain me this para.</u>
Regards, waiting for reply.
