Research On Application Of Materiality In Accounting And Auditing Practice

The concept of materiality is widely used in accounting and auditing practice.Important accounting affairs and accounting data need to be closely paid attention to and correctly be reflected by the accounting staff of the enterprise.At the same time,important accounting information is also the area that CPA pays attention to in the audit.These items and data also affect the CPA's judgment on the importance of the audit.There are closely link between this two things.The materiality of business management affects the fair expression of financial statements.Therefore,it is unnecessary for an accountant to perform excessive judgment deviation when carrying out materiality judgment.At the same time,for CPA,they need to ensure that the financial statements are "fairly reflected" in all major aspects of the company's financial performance,business results and cash flows.The "major aspect" itself also contains the understanding and judgment of the materiality of the audit.In the practical,both accounting materiality and audit materiality must meet the requirements of verifiability,which means the judgments of professional stuff could be verified by others.This principle is now been challenged.In order to study the materiality of accounting and auditing from the point of view of practical application,we use the classic case of the takeover of the South securities,trying to find the problem,analysis the reasons and give solutions.The thesis adopts case analysis method and normative analysis method,using the case of South securities to analysis the problems it reflected,such as the criterion of audit materiality and accounting materiality is fuzzy and unscientific.We start from reliable facts,and thus analyzes the doubtful points reflected in the incident from multiple angles.And then we would find the factors that cause the deviation of accounting importance judgment and audit importance judgment.But we use the case as an introduction,the real purpose is to try to abstract it to the practical application of accounting materiality and audit materiality with a wide range of meanings.We'll explore the crux of this problem in judging accounting materiality and audit materiality and try to give some solutions.Also we will find the relationship between accounting materiality and audit materiality and then doing some researches.Through research we can conclude that the judgment of accounting materiality is highly dependent on profits,it is also subject to the limited rationality of accounting personnel,while audit materiality is limited by the disclosure of audit materiality itself,and the relationship between auditors and the audited units.These two things are not isolated but exist in succession with mutual influence.Besides,they all have the problem of inadequate judgmental verification,hence the work of certified public accountants,accounting personnel,regulatory and other aspects is needed,only in this way can we enhance the level of materiality in accounting and auditing.At the same time,we also hope to quantify the relevant regulatory authorities to strengthen the accounting standards and the importance of auditing materiality level of disclosure,so as to strengthen the supervision of the public,also makes the accounting materiality and audit materiality can be more attached to each other,so as to enhance the credibility of accounting information and audit report.