Decisions on materiality, risk assessment, sufficiency of evidence and the type of opinion require professional judgement. Its basis must be clearly documented in the audit file; undocumented judgement cannot be defended in a review.
Source: BDS 200
Related terms
Professional scepticismThe auditor having a questioning mind, being alert to conditions that may indicate error or fraud and critically assessing evidence.MaterialityA misstatement being large enough, individually or together with others, to influence the economic decisions of users of the financial statements.Audit documentationThe full set of working papers recording the audit procedures performed, the evidence obtained and the conclusions reached.Adverse opinionThe opinion in which the auditor states that the financial statements are not presented fairly, where misstatements are both material and pervasive.Agreed-upon proceduresAn engagement in which the practitioner performs procedures agreed with the entity and, where relevant, a third party, and reports only the findings without providing assurance.Analytical proceduresThe evaluation of financial information through analysis of plausible relationships among financial and non-financial data.
Last updated: November 8, 2026 · This definition is for general information only.