Calculating materiality is one of the fundamental concepts in auditing. MyWorkpaper's materiality workpaper provides you with an automated, but highly flexible workpaper, ensuring that you are able to effectively apply your professional judgement whilst calculating materiality, but also retain the advantages of being an electronic system.
For the purpose of instructing you on how to use the B5 Materiality workpaper, we will break the completion of the workpaper into four distinct steps, being:
Before we begin with the specific details of the Materiality workpaper, please open B5 Materiality from the Working Paper Index.
Ensure you have imported the trial balance into the audit file;
Review the standard benchmarks provided (Assets and Members Benefits) and if required add any additional benchmarks by selecting them from the dropdown menu;
Next to the MATERIALITY field, click on the dropdown menu and select the appropriate materiality benchmark you would like to use;
Enter an appropriate percentage for the Overall Materiality, Performance Materiality and the Amount below which Misstatements are Clearly Trivial and the materiality figures will update automatically;
If required, you are able to calculate specific materiality for any other area of the audit by following the below procedures.
Underneath the overall materiality calculation, click on the Add Audit Area button;
In the box provided, insert a description of the specific area and the type of materiality being calculated (i.e. overall materiality for the area or performance materiality) and manually input the levels of materiality;
As compliance materiality is qualitative rather than quantitative, there is no easy way to bring high levels of automation to the process as it requires a significant amount of professional judgement.
In the SMSF industry template materiality workpaper we have provided you with some standard text which should be considered when formulating your compliance materiality. This is standard text and can be updated on each audit file or in your firm template as required.
Below is a copy of the compliance materiality in SMSF industry template.