ISA UK and Ireland 320 FRC 2009a materiality para. 2 International Auditing and Assurance Standards Board: IAASB International Standards on Auditing: ISA 320 International Accounting Standards Board: IASB IASB 2010 QC11 threshold
ISA UK and Ireland320 ISA UK and Ireland600 FRC 2009c FRC 2009a materiality for the financial statements as a whole para. 10 benchmark para. A3 performance materiality para. 11 para. A12 Public Company Accounting Oversight Board: PCAOB PCAOB 2010 tolerable misstatement
para. 12 para. 13 paras. 10 and 11 para. 12 ISA UK and Ireland 450FRC 2009b FRC 2009c group engagement team paras. 21 a para. A42 b.
component materiality para. A43 para. A44 c. clearly trivial para. A45 d. para. A46 Financial Reporting Council: FRC UK Corporate Governance Code
FRC ISA UK and Ireland 700FRC 2013 Listing Rule para. 19A a. b. c. a. b. FRC IAASB ISA UK and Ireland 700 ISA UK and Ireland 700 equity shares 9.8.6R ISA UK and Ireland 260
b. para. A13B FRC FRC 2015, p. 4 Messier et al. 2005 FRC 2014 A11 A15 ISA UK and Ireland 600 ISA701 IAASB 2015 key audit matters para. 8
planning materiality Steinbart 1987 Friedberg et al. 1989 Friedberg et al. 1989; Martinov and Roebuck 1998 Wright and Wright 1997; Icerman and Hillison 1991 Elder and Allen 1998; Allen and Elder 2005 Allen and Elder 2005 Blokdijk et al. 2003
Eilifsen and Messier 2015 overall materiality Eilifsen and Messier 2015 EBITDA
FRC 2015 FTSE100 Eilifsen and Messier 2015
Eilifsen and Messier 2015 FRC 2015 Main Market Great Britain and Northern Ireland AIM
FTSE100 FTSE250
PricewaterhouseCoopers PwC Deloitte & Touche DT KPMG Ernst & Young EY Grant Thornton GT BDO
Rolls-Royce Holdings
profit before tax adjusted for certain non-recurring highlighted items profit before tax before exceptional items and other adjustments including impairment. underlying profit from operations normalised profit before tax from continuing operations forecast adjusted profit before interest and tax forecast profit before tax from continuing operations average benchmark profit before tax over the previous five-year period five-year average profit before tax before exceptional items EBITDA business performance before taxation headline profit before tax ISA UK AND IRELAND 320
Blokdijk et. al. 2003 DT KPMG EY PwC EY PwC DT KPMG
DT EY KPMG PwC GT BDO BDO DT GT DT EY FRC 2015 ISA UK and Ireland 700 A13B
EY BDO GT FRC 2015 BDO EY GT DT KPMG PwC BDO GT EY DT KPMG PwC EY ISA UK and Ireland 700 A13B unadjusted differences
BDO DT EY GT KPMG PwC DT ISA UK and Ireland 700 A13B
P/L B/S EY P/L B/S PwC P/L B/S KPMG P/L B/S KPMG P/L B/S KPMG P/L B/S KPMG P/L B/S KPMG KPMG KPMG KPMG ISA UK and Ireland 450 A15 KPMG KPMG ISA UK and Ireland 450 A22
ISA UK and Ireland 700 A13B BDO1 DT11 EY3 GT5 KPMG1 PwC4
component COMMUNISIS ISA UK and Ireland 700 A13B
FRC 2015
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2009c, International Standard on Auditing UK and Ireland 600, Special considerations audits of group financial statements including the work of component auditors, FRC. 2013, International Standard on Auditing UK and Ireland 700, The independent auditor s report on financial statements, FRC. 2014, International Standard on Auditing UK and Ireland 260, Communication with those charged with governance, FRC. 2015, Extended auditor s reports: a review of experience in the first year, FRC. Friedberg, A. H., J. R. Strawser, and J. H. Cassidy 1989, Factors affecting materiality judgments: a comparison of Big Eight accounting firms materiality views with the results of empirical research, Advances in Accounting, Vol. 7, pp. 187201. Icerman, R. C., and W. A. Hillison 1991, Disposition of audit-detected errors: Some evidence on evaluative materiality, Auditing: A Journal of Practice & Theory, Vol. 10 No. 1, pp. 2234. International Accounting Standards Board IASB 2010, Conceptual Framework for Financial Reporting, 2010.; IFRS IFRS2014 International Auditing and Assurance Standards Board IAASB 2015, International Standard on Auditing 701, Communicating key audit matters in the independent auditor s report, IFAC. Martinov, N., and P. Roebuck 1998, The assessment and integration of materiality and inherent risk: An analysis of major firms audit practices, International Journal of Auditing, Vol. 2 No. 2, pp. 103126. Messier, William F. Jr., Nonna Martinov-Bennie, and Aasmund Eilifsen 2005, A review and integration of empirical research on materiality: two decades later, Auditing: A Journal of Practice & Theory, Vol. 24 No. 2, November 2005, pp. 153187. Public Company Accounting Oversight Board PCAOB 2010, Auditing Standard No. 11, Consideration of materiality in planning and performing an audit, PCAOB. Steinbart, P. J. 1987, The construction of a rule-based expert system as a method for studying materiality judgments, The Accounting Review, Vol. 62 No. 1, pp. 97116. Wright, A., and S. Wright 1997, An examination of factors affecting the decision to waive audit adjustments, Journal of Accounting, Auditing & Finance, Vol. 12 No. 1, pp. 1536.