The auditor must bear in mind materiality in planning is important in the audit planning memorandum. Materiality varies and depends on the issues and the size of the program or activity or combination of both chose in an organisation. ISSAI 300 does specifically mention the level of materiality but some hints or guides in preparing the materiality level in performance audit planning. In the audit planning memorandum, an auditor should consider materiality at all stage of the audit program or activity or processes or elements build. Materiality in Performance audit is different from financial audit and compliance audit whereas the materiality defines in the performance audit more broaden than the two types of audit. In the performance audit, besides the financial aspect, there should be given emphasise on social and political aspects of the subject matter. Materiality in performance is a subjective manner which depends on the magnitude of its impacts. It depends whether the activity is comparatively minor and whether shortcomings in the area focus could influence other activities within the audited entity. An issue is considered material if the issues are considered important, and improvements would have an impact on the organisation activity or program. It is to be said less materiality if the issues are routine and the impact is restricted to a small area or minimal. In the performance audit, monetary wise is not be a primary concern but the result and outcome of whether the program assessed met the program objective set up by the entity. So, it is important to consider while preparing the audit planning the matters of potentially significant and materiality of all aspects of performance audits such as the selection of topics, evaluation of evidence and document and management of the risks, low impacts audit finding or report — transformation in the workplace.
Datuk Juhari Bin Haron