Materiality in Government Auditing

Journal of Accountancy, February 1994, 177(2): 71-76

Posted: 2 Sep 2014

See all articles by K. K. Raman

K. K. Raman

The University of Texas at San Antonio

Relmond Van Daniker

Association of Government Accountants

Date Written: 1994

Abstract

Current practice regarding materiality in government audits under generally accepted auditing standards varies widely. In this empirical study, we investigate whether government auditors agree on an appropriate base for calculating materiality and what percentages they apply. In a government context, the probability of client financial failure (and subsequent discovery of material financial statement misstatements) is unknown or very low. This relatively stable environment is characterized by competitive audit pricing practices and, in general, an undue emphasis on price in auditor selection. Our study provides information about materiality levels implicit in current practice and is valuable to auditors in audit planning and performance evaluation.

Keywords: Materiality, Government auditing

JEL Classification: G18, L11, L15, L51, L80, M40, M41, M42, M48

Suggested Citation

Raman, K. K. and Van Daniker, Relmond, Materiality in Government Auditing (1994). Journal of Accountancy, February 1994, 177(2): 71-76. Available at SSRN: https://ssrn.com/abstract=2486604

K. K. Raman (Contact Author)

The University of Texas at San Antonio ( email )

One UTSA Circle
San Antonio, TX 78249
United States
210-458-8749 (Phone)

Relmond Van Daniker

Association of Government Accountants ( email )

2208 Mount Vernon Avenue
Alexandria, VA 22301-1314
United States

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