Appendix No. 12

to the Order of the Ministry of Finance of the Russian Federation of January 9, 2019 No. 2n

International standard of audit 320 "Materiality in case of planning and carrying out audit"

The International Standard of Audit (ISA) 320 "Materiality in case of planning and carrying out audit" should be considered together with MCA 200 "Main objectives of the independent auditor and carrying out audit according to International standards of audit".

Introduction

Scope of this standard

1. This International Standard of Audit (ISA) establishes the auditor's obligations on application of the concept of materiality when planning and carrying out financial records audit. MCA 450 <1> explains how the principle of materiality in case of impact assessment on audit of the revealed misstatements is applied, and also influences of uncorrected misstatements if such are available, on the financial reporting.

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<1> MCA 450 "Assessment of the misstatements revealed during audit".

Materiality in the context of audit

2. In different concepts of preparation of the financial reporting the concept of materiality is considered in the context of preparation and accounts presentation. Though the approach provided by different concepts can differ, usually in them it is specified that:

- misstatements, including omissions, are considered essential if they separately or are in total capable as it can be assumed reasonably, to influence the economic decisions made by users on the basis of the financial reporting;

- professional judgments concerning materiality are accepted taking into account all attending circumstances and such factors as the size or nature of misstatement, or both of these factors at the same time exert impact on them;

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