Calculating Materiality AU - Audit and Review 1.0

Calculating Materiality is one of the fundamental concepts in auditing.

MyWorkpapers 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.

The following chapter only discussed how to use the functionality of the Materiality workpaper in MyWorkpapers, and is not intended to instruct you on how to calculate materiality for the purposes of being compliant with the International Auditing Standards.

How to Use the Materiality Workpaper

The calculation of Materiality has been split into three work papers, depending on which stage of the audit process you are at, however all three documents are identical in their layout. The three materiality work papers are:

  1. AD1 - Materiality - Interim

  2. AD2 - Materiality - Initial

  3. AD3 - Materiality - Final

For the purpose of instructing you on how to use the Materiality workpaper, we will break the completion of the workpaper into four distinct steps, being:

  1. Calculating materiality for the financial report as a whole;

  2. Calculating materiality level for particular classes of transactions, account balances or disclosures;

  3. Calculating clearly trivial materiality level; and

  4. Calculating performance materiality.


Step 1 - Determining Materiality for the Financial Report as a Whole
  1. From the drop down box, select the Materiality benchmark you wish to use

  2. The amount of the account balance is linked automatically from the Working Trial Balance (if you have imported both interim and initial balances)

  3. Make any normalisation adjustments to the profit before tax using the input boxes provided

  4. Provide the percentage basis for determining Materiality.

Step 2 - Calculate Materiality for Particular Transactions or Account Balances

As suggested by the heading, this Materiality is only completed if you require Materiality for a particular class of transactions or account balances. All cells in this table are input cells.

Step 3 - Calculate Clearly Trivial Materiality Level

This amount is calculated by direct input.

Step 4 - Calculating Performance Materiality

As identified in the overall Materiality calculation, the account balances for the performance Materiality are automatically calculated from the working trial balance. Then to obtain the materiality range, input the percentage basis (as a whole number). The Materiality range will then automatically calculate.


Any supporting documents can then be uploaded at the end of the document.

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