Assessing Materiality in the FSA
After calculation of the materiality the Financial Statement Areas Worksheet automatically selects which FSAs are material based on balances. Users can override the materiality assignment based on professional judgment. User overrides are clearly shown.
Audit will suggest the deletion of complete audit sections for immaterial FSAs.
- Click Refresh to update the planning balance from the Working Trial Balance.
- Address the accounts that have the materiality checkbox selected in the Materiality Assessment column.
- Hover of the checkbox to view the materiality details or from the Areas menu select Display Materiality Details. For more information on these columns, see FSA Columns.
- If applicable, you can override the automatic assessment if necessary by selecting or clearing checkboxes.
- When applicable, assess any warning indicators in the column and enter an explanation in the Audit Response Finalisation field to remove the warning indicator. Please note that warning indicators only appears if the firm author has the feature enabled in the AO - General Options document. The FSA consist of the following warning icons:
- - indicates that there is a risk of insufficient audit work. This can when the final balance exceeds materiality and the planning balance does not. Also appears if an immaterial FSA item becomes material based on an unrecorded adjustment.
- - indicates that there is a risk of over-auditing. This can occur when the planning balance exceeds materiality but the final balance does not. Also appears if a material FSA item becomes immaterial based on an unrecorded adjustment.
- - indicates that the aggregate of proposed adjustments + final balance is greater than materiality. Also, indicates that there is a risk of insufficient audit work if unrecorded adjusting journal entries become recorded.
- - indicates there is a risk of over-auditing if unrecorded adjusting journal entries become recorded.
- From the toolbar, click the Audit Optimiser Confirmation Report icon to remove any immaterial areas.
You can bring back programs for material FSA items which were deleted manually or by the Optimiser or from subsequent year. To bring back the program to the file, simply click the icon located to the right of the reference.