EU-kommissionens forslag om præsentation af væsentlighedsniveauer i revisors erklæring

Christian Rosendahl Poulsen & Jack Frimand

Student thesis: Master thesis


Based on the Green Paper Audit Policy: Lessons from the Crisis, the European Commission has submitted the below proposal: “lay out the details of the level of materiality applied to perform the statutory audit” Based on the theorists David Flint and Mautz & Sharaf, this thesis aims to assess whether the European Commission’s proposal on presentation of auditor’s materiality levels in the independent auditor’s report will improve the users’ understanding of the performed audit and thus reduce the expectation gap. In order to assess the proposal, we have based our analysis on an assessment of the current standard on determination of materiality, ISA 320 ”Materiality in Planning and Performing an Audit”. We perform an analysis of whether the current ISA 320 needs to be changed. Subsequently, we make an assessment of the information in the current auditor’s report, cf ISA 700 ”Forming an Opinion and Reporting on Financial Statements”. Based on David Flint and Mautz & Sharaf, as well as the issues noted in the green paper, we assess the need for changes to the independent auditor’s report. Material matters from the Green Paper are incorporated in the thesis’s proposal for a new auditor’s report. The purpose of the prepared auditor’s report is to include the requested information in order to reduce the expectation gap. Finally, in our analysis we assess the value of presenting the auditor’s materiality levels in the independent auditor’s report. Advantages and disadvantages are discussed. In conclusion, we perform an overall assessment. Based on our conclusions made throughout the thesis, we reply to our problem statement. The thesis provides an assessment of whether the European Commission’s proposal will help reduce the established expectation gap and whether the proposal will improve the value of the independent auditor’s report to the users.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2012
Number of pages114