Performance Materiality

Free CPA AUD (Auditing & Attestation) lesson in Assessing Risk and Developing a Planned Response. 11 min read, ~1,625 words.

Performance materiality equals 50% to 75% of overall (financial statement) materiality, set to absorb aggregation risk. Tolerable misstatement is performance materiality at the account level; the sum across accounts can exceed overall materiality. Clearly trivial threshold (typically 5% of performance materiality) is the de minimis floor; below it, do not...

What this lesson covers

• Content
• Example 1
• Example 2
• Common Mistakes
• Check Your Understanding
• Exam Shortcuts

Learning objectives

• II.D2

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