Filing the Gap: Understanding Materiality from a Jewish Perspective.

• In Event: Breakfast and Research & Education Table Forum
  In Roundtable Session: Table 15: Materiality

Abstract

ABSTRACT

External auditors use the materiality concept to plan and execute financial statement audits. Despite their careful and measured approach, too often they fail to identify fraud and impending business failures, and thus fail to warn external stakeholders, as, for example, in the lapse of sales practice integrity 2016 Wells Fargo Matter. Auditors should assess how they apply materiality concepts in practice, and not over-rely on stated balances to the qualitative impact of fraud and misstatements.

One approach is to review materiality judgments from other cultures that have been practiced and refined over many years. To that end, we explore centuries-old Judaic applications of materiality and provide examples of how these concepts can provide insight on modern auditing guidelines in order to improve auditing judgments.

Authors

• Eileen Z Taylor, North Carolina State University

• Alan Reinstein, Wayne State University

• Shlomo Sawilowsky, Wayne STate University