What is Materiality?

What is materiality? 

Materiality refers to quantitative and qualitative omissions or misstatements that make it probable the judgment of a reasonable person would have been changed or influenced.

These omissions or misstatements can be individually or in the aggregate material.

Accountants and auditors are concerned about this. Remember what will be in your reports:

• Review report: "Based on my review, I am not aware of any material modifications that should be made...."
• Audit report: "In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ....."

Materiality needs to be considered at two times, in

• Planning the audit and designing audit procedures.
• Evaluating whether financial statements taken as a whole are presented fairly, in all material respects, is accordance with GAAP.

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What are the functions of CA's engaged in Public practices?

FUNCTIONS OF CHARTERED ACCOUNTANTS ENGAGED IN PUBLIC PRACTICES:

Chartered Accountants engaged in public practice mainly carry out the following functions:

1. Perform professional services involving auditing or verification of financial transactions, books, accounts or records, or preparation, verification or certification of financial, accounting and related statements

2.   Render professional services or assistance in or about matters of principles or details relating to accounting procedures, costing techniques, or recording, presentation or certification of financial facts or data

3.   Render professional services or assistance as Management Consultant in or about matters of accounting methods, systems and techniques involving forecasting, in order to assist management in its task of formulating polices, programmes, management systems and procedures for maintaining and improving efficiency.

Apart from specialization in traditional accounting and auditing services, CA Firms are also engaged in:

• Taxation services
• Information Technology
• Statutory and Liquidation services, company law, secretarial works etc. 
• Management consultancy services encompassing, inter alia, the following areas:
•  Valuation of business and shares
• Designing of accounting, internal control and operational systems for organizations, and
• Rendering of miscellaneous services like maintaining computerized financial accounts of companies, business process re-engineering, management selection and recruitment, disinvestments of government enterprises, etc
• Due diligence study, feasibility study etc.

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What is audit Committee?

Audit Committee:

An audit committee is a specialized governing body within a company. Both internal and external auditors report their findings to the audit committee. It is the responsibility of the committee to provide direction, scope, and support to the auditors as they carry out their work. An audit is a detailed review of the transactions and business processes of a company.

The audit committee has four main functions: select the audit firm, provide guidance to auditors, review audit report and inform the company board of directors of the results of the audit. The committee is separate from the regular governing boards in order to ensure a fair and unbiased audit review. All publicly traded companies are required to issue audited financial statements each year.

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