Just went through all your auditing lectures, and most of your advanced financial lectures. These were the best videos I've seen, and greatly helped me in my studies! Just wanted to say thank you!
I love it the way you explaining sir. You are choosing words not ambiguous in your explanation and that how it is efficiently and effectively to learn accounting. Besides, you are siting so much examples which I really love because that the way i could easily learn and relate it to the real scenarios. Keep it up sir. Your video really help me a lot. Gracias!
Yes. Auditors will propose an adjustment journal entry during and towards the end of the audit. After doing so, the client can either book the adjustment or not. Most will book the adjustment in order to get an unqualified opinion.
Can we say performance materiality is materiality level set for specific account balances ? And overall materiality is materiality for all misstatements as a whole?
hi, around @7:45 you said something about $10m company and later you mentioned 10% of 1million dollar company. was it sleep of tongue? do you mind explaining? thank you
so what if a misstatement is greater than tolerable error but less than the overall misstatement. Does the client still have to adjust their books in order for an unqualified audit opinion to happen or no since its less than the overall misstatment?
Not necessarily. It would depend on testing procedures. Often times, we can perform other tests to help substantiate the tolerable error. When we do that, it may allow us to "pass" the test. However, because tolerable errors are at a lower level of the financial statements and general journal, the clients often make the adjustment to bring the misstatement under the tolerable error and then we are good as auditor. This of course depends on an accounting firm's guidelines though.
You said, the audit fees could increase 10times for providing absolute assurance?? Could you give me more reliable source? since i need for academic citations.... thanks in advance...
Thanks for watching my video. Hopefully you got a lot out of it and learned a lot about how materiality affects a company. If you have further questions, feel free to comment below.
Just went through all your auditing lectures, and most of your advanced financial lectures. These were the best videos I've seen, and greatly helped me in my studies! Just wanted to say thank you!
Thanks for free lectures with easy explanations!
You are welcome! - Patrick
I am having my audit test tonight and this is really helpful. Thanks!
I love it the way you explaining sir. You are choosing words not ambiguous in your explanation and that how it is efficiently and effectively to learn accounting. Besides, you are siting so much examples which I really love because that the way i could easily learn and relate it to the real scenarios. Keep it up sir. Your video really help me a lot. Gracias!
very detailed and helpful... appreciate your lecture
thanks so much for responding. So generally the client will make an adjustment to bring the misstatement below tolerable error.
Yes. Auditors will propose an adjustment journal entry during and towards the end of the audit. After doing so, the client can either book the adjustment or not. Most will book the adjustment in order to get an unqualified opinion.
Can we say performance materiality is materiality level set for specific account balances ?
And overall materiality is materiality for all misstatements as a whole?
No even performence materiality is set for financial statement as a whole. Although you can set materiality for different items separately.
hi, around @7:45 you said something about $10m company and later you mentioned 10% of 1million dollar company. was it sleep of tongue? do you mind explaining? thank you
Really nail the concept of materiality thanks really not clear in a lot of paid books and lectures
Explained clearly . Thanks
Nicely explained
so what if a misstatement is greater than tolerable error but less than the overall misstatement. Does the client still have to adjust their books in order for an unqualified audit opinion to happen or no since its less than the overall misstatment?
Not necessarily. It would depend on testing procedures. Often times, we can perform other tests to help substantiate the tolerable error. When we do that, it may allow us to "pass" the test. However, because tolerable errors are at a lower level of the financial statements and general journal, the clients often make the adjustment to bring the misstatement under the tolerable error and then we are good as auditor. This of course depends on an accounting firm's guidelines though.
You said, the audit fees could increase 10times for providing absolute assurance?? Could you give me more reliable source? since i need for academic citations.... thanks in advance...
Open your eyes
Thanks for watching my video. Hopefully you got a lot out of it and learned a lot about how materiality affects a company. If you have further questions, feel free to comment below.
Patrick Lee great response! This video was very useful