What Is Materials Performance

Question 1

What

Answer 1

Performance Materiality Definition

Performance materiality is the amount set by the auditor, below overall materiality, to minimize the risk that the total of uncorrected and undetected misstatements exceeds materiality.

Purpose

1. Reduces risk of aggregate misstatements
2. Addresses individually immaterial misstatements that may collectively cause material misstatement
3. Accounts for potential undetected misstatements