Materiality in Auditing.The term material is of critical importance in the auditing context (Porter et al.,2014, p.73).Materiality levels are more secret than the Coca Cola formula (Mock et al., 2009,p.4).Discuss (check midcourse.net for the help you need) these abstracts in the context of academic research and recent developments in audit regulation and practice.Assignment GuidanceThe aim of this assignment is to assess your ability to construct a sustained academic argument around a key concept in auditing in the light of recent developments.The following questions may aid in researching, planning and writing your essay:Is materiality of critical importance in auditing? If so, why?Have the materiality levels used by auditors been secret? If so, why?What has academic research shown about the importance and secrecy of materiality?How has recent audit regulation, particularly in relation to audit reporting,changed audit practice in relation to the disclosure of materiality?Is it possible to conclude whether or not this change is for the better?This is an academic essay. It will require a brief introduction, a clear conclusion, an appropriate bibliography, and referencing in the Harvard style. You should support your argument by at least one recent example from an audit report.Administrative DetailsThe word limit for this assignment is 2,000 words ( 10%). Do not copy material from any sources for your answer to this question without quotation marks or appropriate referencing asthis constitutes plagiarism.Guide to Sources:A starting point for your independent research in this area could be any good recentauditing text book. An appropriate source would be the relevant sections in our course text: Porter, B. et al. (2014) Principles of External Auditing (4th ed.), pp. 73-77, 350-361.The full text of the current International Standard on Auditing ISA 320 Materiality inPlanning and Performing an Audit can be accessed on the website of the InternationalFederation of Accountants (IFAC) athttps://www.ifac.org/sites/default/files/publications/files/A018%202013%20IAASB%20Handbook%20ISA%20320.pdf.The IFAC website also contains the research report from which the second abstract in the essay question is taken, Mock, T. et al. (2009) The Unqualified Auditors Report:A Study of User Perceptions, Effects on User Decisions and Decision Processes, and Directions for Further Research, athttp://www.ifac.org/sites/default/files/downloads/Study__1_ASB_Summary_Report.pdf.A review of academic research on materiality to 2005, Messier, W. et al. (2005), A Review and Integration of Empirical Research on Materiality: Two Decades Later,can be accessed at http://papers.ssrn.com/sol3/papers.cfmabstract_id=786688.A review of current audit practice in relation to materiality in the UK can be found inthe recent Financial Reporting Council (FRC) publication, FRC (2013), Audit Quality Thematic Review Materiality, available athttps://frc.org.uk/Our-Work/Publications/Audit-Quality-Review/Audit-QualityThematic-Review-Materiality.pdf.This document also provides brief coverage of the recent changes to audit reporting in the UK.The FRC website provides a generic example of the revised audit report now used in the UK athttps://www.frc.org.uk/Our-Work/Publications/Audit-and-Assurance-Team/ISA-700-%28UK-and-Ireland%29-700-%28Revised%29/Illustrative-example-of-a-UKauditor-s-report.aspx.Examples of such audit reports can also be found in the annual reports of UK companies for years ended from 30 September 2013 onwards. An example can be accessed athttp://www.tescoplc.com/files/pdf/reports/ar14/download_annual_report.pdf, pp.65-
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