The Relationship Between Materiality Thresholds and Judgments of Fraud Risk

摘要: Researchers and practitioners have long debated the arguments in favor of against providing specific mathematical materiality guidelines auditing standards. Yet, there is little empirical evidence about relationship between thresholds audit risk judgments absence such guidelines. In this study, 152 Big Six managers evaluated for an simulation based on actual case where material fraud was undetected. The auditor subjects were allowed to choose they would examine before reaching a decision. major findings study are that while differ, these differences not statistically significantly related either or amount auditors chose rendering their judgments. This does support need quantitative guidance accounting standards materiality. However, other considerations (such as concern legal liability) could also impact advisability setting thresholds.