Using Rules-of-thumb to estimate materiality: Evidence from Taiwanese publicly-listed firms

Author: An-De Siao

Advisor: ,Su - advisor,Li - chair,Ku - co-chair

Educational level: Master

Discipline: Business Administration

University: Dong Hwa University

Abstract: Professional standards have required that auditors to make a preliminary judgment about materiality levels in planning the audits, but no specific criterion has been given to the auditors to estimate the materiality levels. Without any specific guideline, in practice, a number of "rule-of-thumb" has been adopted by the CPA to calculate the materiality amount This study is based on Pany and Wheeler ”„s framework comparing companies in different industries using rule-of thumb analysis for the materiality judgment. Results show that auditors can obtain less evidences when”G1.use 1% of equity in the listed company at stock exchange market2.use audit gauge in the listed company at over-the-counter marketOn the other hand, auditors should obtain more evidences when”G1.use gross profit in the listed company at stock exchange market2.use gross profit in the listed company at over-the-counter market Finally, this study is based on Bernardi and Pincus”¦s framework to understand whether auditors make quantitative materiality judgments consistent with the ten rules of thumb by questionnaire. Results show that auditors make quantitative materiality judgments consistent with the ten rules of thumb.

Visit Source URL

Download full report

Keywords: , professional judgment, rule of thumb, materiality levels


More from Dong Hwa University

(view more...) Add to list

Abstract: ”@”@After hundred years of operation, the irrigation and drainage business makes major contributions to the development of Taiwan economy. The investment to the irrigation and drainage infrastructures establish a solid foundation for rapid growth of agricultural production as well as industrial and commercial activities. But the agricultural share in GNP...

(view more...) Add to list

Abstract: The maximum interval subgraph problem(MISP for short)on a graph G is the problem of finding an induced subgraph G'' of G such that G'' is an interval graph with the maximum number of vertices. The maximum connected interval subgraph problem(MCISP for short)is similar to MISP. The difference is the solution...

(view more...) Add to list

Abstract: The purpose of this study is research the process of school relocation in I-Lan County. First, what was the reason for school in I-Lan has to relocate? Second, what was happened during the process of school relocation? Third, who participated in this process? Forth, what kind of construction style did...

More related to Business Administration

(view more...) Add to list

Abstract: ”@”@The purpose of the research on eutrophication is to certify the response strategies for water body eutrophication.According to the procedures, it is necessary to investigate the in situ background, assess the eutrophication level and variation process, and then to evaluate the correlation between the eutrophication factors.”@”@This research was conducted on...

"Classic Case Studies in Accounting Fraud" (view more...) Add to list

Abstract: Over the past several years, accounting fraud has dominated the headlines of mainstream news. While these recent cases all involve sums of money far in excess of any before, accounting fraud is certainly not a new phenomenon. Since the early days on Wall Street, fraud has consistently fooled the markets,...

"Good-bye, All My Fathers": Modernism, Displacement, and F. Scott Fitzgerald's Fiction of the Early 1930s (view more...) Add to list

Abstract: F. Scott Fitzgerald’s fiction of the early 1930s presents meaningful attempts by male protagonists to critically examine the ideals and values of their fathers (or, America) and through this examination to arrive at affirmative self-knowledge in the face of a decaying, destructive world. My thesis identifies and explores an important...