The Professional Judgment Of SW Accounting Firm’s Audit Materiality Level Research

The concept of the Audit materiality level is widely used in the audit sampling, the purpose is to help the CPA to complete the audit work effectively, to avoid the legal liability. In recent years, the audit failure cases are increasing, and the increase of the rate of litigation has caused a great impact on the accounting firms. In addition, the liquidity of the firms is large, and different CPA have different levels of audit materiality. In order to improve audit efficiency and effect, it is necessary to judge the Audit materiality level, and to optimize the process of reference standards and judgment.This paper uses system analysis, comparative analysis, case analysis method, research on the professional judgment of Audit materiality level, the practice of accounting firms and other related theories, then distinguish all of the SW’s clients on high risk and low risk industries, and analysis the important fields of different risk companies, integrate the research results into the system of comprehensive improvement, then combined with the specific audit case of SW accounting, summarizes the contents and specific implementation measures finally. There are three main conclusions:First, the professional judgment of Audit materiality level depends on the knowledge experience, expertise, practical experience and the comprehensive judgment of the audits, which fully depends on the audit environment and the task of mutual influence. Second, The audit units can be divided into high risk and low risk industries according to the degree of difficulty and risk of the industry, high risk industries suitable for use lower percentage level, the low risk industries are on the contrary. The base of the selection tends to be consistent in the same industry. Third, The trend of professional judgment of accounting firms should be the comprehensive judgment of the human brain and computer system.Based on the full consideration of the Audit materiality professional judgment and the influencing factors, this paper makes a detailed classification and optimization of the professional judgment of it. At the same time, combined with the author’s personal experience in audit practice and current industry experience, the author hopes to provide a useful reference for the industry as a whole in theory and practice.