Audit materiality reported level : the case of the UK
Autor(a) principal: | |
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Data de Publicação: | 2023 |
Tipo de documento: | Dissertação |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10400.14/42375 |
Resumo: | This study considers how auditors apply materiality, taking advantage of recent changes to ISA700 (UK) which requires disclosure of the level of materiality in the audit report for all companies listed on the London Stock Exchange (LSE). The literature shows the relevance of the concept of materiality, but does not address how it is used by auditors. This gap is the result of the lack of information available for analysis and non-universal regulations, which allows us to benefit from the mandatory disclosure requirement for LSE listed companies. Our analysis is exploratory and aims to find evidence of the effects and relationships anticipated by the audit literature and regulations. We analysed the period between 2016 and 2021 and the results present evidence on some determinants that affect the level of materiality, in particular our analysis addresses the inverse relationship between audit risk and materiality, i.e., the higher the audit risk, the lower the materiality should be. We present detail that auditors have adapted to the increased audit risk due to the pandemic in 2019 and on the effect of audit fees on materiality. Finally, an analysis of the impact on audit risk materiality of an auditor transition is provided. The disparities in results motivate an intervention by regulators to determine how auditors should determine materiality. |
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Audit materiality reported level : the case of the UKMaterialityAudit riskISA 700FTSE350MaterialidadeRisco de auditoriaDomínio/Área Científica::Ciências Sociais::Economia e GestãoThis study considers how auditors apply materiality, taking advantage of recent changes to ISA700 (UK) which requires disclosure of the level of materiality in the audit report for all companies listed on the London Stock Exchange (LSE). The literature shows the relevance of the concept of materiality, but does not address how it is used by auditors. This gap is the result of the lack of information available for analysis and non-universal regulations, which allows us to benefit from the mandatory disclosure requirement for LSE listed companies. Our analysis is exploratory and aims to find evidence of the effects and relationships anticipated by the audit literature and regulations. We analysed the period between 2016 and 2021 and the results present evidence on some determinants that affect the level of materiality, in particular our analysis addresses the inverse relationship between audit risk and materiality, i.e., the higher the audit risk, the lower the materiality should be. We present detail that auditors have adapted to the increased audit risk due to the pandemic in 2019 and on the effect of audit fees on materiality. Finally, an analysis of the impact on audit risk materiality of an auditor transition is provided. The disparities in results motivate an intervention by regulators to determine how auditors should determine materiality.Este estudo analisa a forma como os auditores aplicam a materialidade, tirando partido das recentes alterações ao normativo ISA700 (UK) que exige a divulgação do nível de materialidade no relatório de auditoria para todas as empresas cotadas no London Stock Exchange (LSE). A literatura mostra a relevância do conceito de materialidade, mas não analisa a forma como esta é utilizada pelos auditores. Esta lacuna é o resultado da falta de informação disponível para análise e regulações não universais, o que nos permite beneficiar da obrigatoriedade de divulgação para as empresas cotadas no LSE. A nossa análise é exploratória e tem por objetivo encontrar evidência de efeitos e relações antecipadas pela literatura e normativo de auditoria. Analisámos o período entre 2016 e 2021 e os resultados apresentam evidência sobre alguns determinantes que afetam o nível de materialidade, nomeadamente a nossa análise aborda a relação inversa entre o risco de auditoria e a materialidade, ou seja, quanto maior for o risco de auditoria, menor deverá ser a materialidade. Apresentamos detalhe de que os auditores se adaptaram ao aumento do risco de auditoria devido à pandemia em 2019 e sobre o efeito dos honorários de auditoria na materialidade. Finalmente, é feita uma análise do impacto na materialidade do risco de auditoria numa transição do auditor. As disparidades nos resultados motivam uma intervenção de reguladores para determinar a forma como os auditores devem determinar a materialidade.Alves, Paulo Alexandre PimentaVeritati - Repositório Institucional da Universidade Católica PortuguesaCosta, Eduardo Maria Almeida Leitão Nazaré2023-09-14T17:57:34Z2023-07-142023-042023-07-14T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/masterThesisapplication/pdfhttp://hdl.handle.net/10400.14/42375TID:203350103enginfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-09-19T01:42:28Zoai:repositorio.ucp.pt:10400.14/42375Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T20:29:35.169275Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
Audit materiality reported level : the case of the UK |
title |
Audit materiality reported level : the case of the UK |
spellingShingle |
Audit materiality reported level : the case of the UK Costa, Eduardo Maria Almeida Leitão Nazaré Materiality Audit risk ISA 700 FTSE350 Materialidade Risco de auditoria Domínio/Área Científica::Ciências Sociais::Economia e Gestão |
title_short |
Audit materiality reported level : the case of the UK |
title_full |
Audit materiality reported level : the case of the UK |
title_fullStr |
Audit materiality reported level : the case of the UK |
title_full_unstemmed |
Audit materiality reported level : the case of the UK |
title_sort |
Audit materiality reported level : the case of the UK |
author |
Costa, Eduardo Maria Almeida Leitão Nazaré |
author_facet |
Costa, Eduardo Maria Almeida Leitão Nazaré |
author_role |
author |
dc.contributor.none.fl_str_mv |
Alves, Paulo Alexandre Pimenta Veritati - Repositório Institucional da Universidade Católica Portuguesa |
dc.contributor.author.fl_str_mv |
Costa, Eduardo Maria Almeida Leitão Nazaré |
dc.subject.por.fl_str_mv |
Materiality Audit risk ISA 700 FTSE350 Materialidade Risco de auditoria Domínio/Área Científica::Ciências Sociais::Economia e Gestão |
topic |
Materiality Audit risk ISA 700 FTSE350 Materialidade Risco de auditoria Domínio/Área Científica::Ciências Sociais::Economia e Gestão |
description |
This study considers how auditors apply materiality, taking advantage of recent changes to ISA700 (UK) which requires disclosure of the level of materiality in the audit report for all companies listed on the London Stock Exchange (LSE). The literature shows the relevance of the concept of materiality, but does not address how it is used by auditors. This gap is the result of the lack of information available for analysis and non-universal regulations, which allows us to benefit from the mandatory disclosure requirement for LSE listed companies. Our analysis is exploratory and aims to find evidence of the effects and relationships anticipated by the audit literature and regulations. We analysed the period between 2016 and 2021 and the results present evidence on some determinants that affect the level of materiality, in particular our analysis addresses the inverse relationship between audit risk and materiality, i.e., the higher the audit risk, the lower the materiality should be. We present detail that auditors have adapted to the increased audit risk due to the pandemic in 2019 and on the effect of audit fees on materiality. Finally, an analysis of the impact on audit risk materiality of an auditor transition is provided. The disparities in results motivate an intervention by regulators to determine how auditors should determine materiality. |
publishDate |
2023 |
dc.date.none.fl_str_mv |
2023-09-14T17:57:34Z 2023-07-14 2023-04 2023-07-14T00:00:00Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/masterThesis |
format |
masterThesis |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10400.14/42375 TID:203350103 |
url |
http://hdl.handle.net/10400.14/42375 |
identifier_str_mv |
TID:203350103 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.source.none.fl_str_mv |
reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
instname_str |
Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
instacron_str |
RCAAP |
institution |
RCAAP |
reponame_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
collection |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
repository.name.fl_str_mv |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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