Materiality
- Term
- Materiality
- Exam
- CISA
- Definition
The significance of an error or weakness to the audit objectives and users of the report, considering both amount and nature.
- Explained
In IS audit, materiality is judged by the effect on objectives, not just money. A small access-control flaw that would let one person approve their own payments can be material even though no loss has occurred, because of what it allows. Materiality guides both what the auditor tests and what is reported.
- In practice
A small coding error that lets anyone approve their own payments is material even if no money has been lost yet.
- Often confused with
- Monetary threshold
- Exam angle
In IS audit, impact on objectives matters more than monetary value alone.
- Related