Importance of considering materiality in selecting sample size
-An auditor is not required to have confidence that all items in a set of accounts are 100% correct. His duty is to give an opinion on the truth and fairness of the accounts. Errors can exist to accounts and yet accounts still give a true and fair view. The maximum error that any particular magnitude can obtain without marring true and fair view is tolerable error. Tolerable error is auditing materiality.
-In his audit planning, the auditor needs to determine the amount of tolerable error in any given population and to carry out tests to provide evidence that the actual errors in the population are less that tolerable error.
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