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ISA 320: Materiality in planning and performing an audit

The auditing standard ISA 320 sets out the requirements for applying the concept of materiality in planning and performing audits of financial statements. Find articles, books and online resources providing quick links to the standard, guidance and recent developments.

Full standard

ISA (UK) 320 (Revised June 2016): Materiality in planning and performing an audit
As issued by the Financial Reporting Council (FRC) in June 2016.

The International Standards on Auditing (UK and Ireland) issued by the FRC are based on the International Standards on Auditing issued by the International Auditing and Assurance Standards Board (IAASB) and published by the International Federation of Accountants (IFAC).

2020 Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements
Latest edition of the handbook published by the IAASB.


The Library provides full text access to a selection of key business and reference eBooks from leading publishers. eBooks are available to logged-in ICAEW members, ACA students and other entitled users. If you are unable to access an eBook, please see our Help and support advice or contact library@icaew.com.

Audit and assurance essentials for professional accountancy exams
Katharine Bagshaw (Wiley, 2013)
This primer on the key concepts of professional auditing and assurance syllabuses has a short section on percentages and benchmarks which highlights some of the benchmarks in use and provides a worked example showing how materiality and performance materiality might be calculated.

Core auditing standards for practitioners
Katherine Bagshaw and John Selwood (Wiley, 2014)
This book contains a complete chapter on materiality which gives some of the benchmarks and percentages in use, along with further detailed examples.

Frequently asked questions in ISAs
Steven Collings (Wiley, 2014)
This book addresses key areas where audit firms are failing which have been flagged up by audit regulators. It includes a chapter on materiality, with worked examples, covering the calculation of financial statement materiality, qualitative and quantitative considerations, materiality considerations during the audit and documentation of materiality.

Articles and books in the Library collection

Selected books

Implementing GAAS: A practical guide to auditing and reporting
Ian Connon (Croner-i)
Implementing GAAS (Generally Accepted Auditing Standards) provides guidance on current UK auditing standards and the supporting Practice Notes, Bulletins and other material. The annually updated title contains examples, illustrations of recent reports and discussion of problem areas, including a chapter on materiality and the audit.

The audit process: Principles, practice and cases
Iain Gray and Stuart Manson (Cengage Learning, 2011)
An introduction to the principles and practice of auditing, with a chapter on sampling and materiality. 

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Further ICAEW support

Audit resources
Information and guidance on completing all stages of an audit, as well as making the decision around whether or not an audit is required. There are links to technical help, webinars, publications and events as well as audit representations.

Audit and Assurance Faculty
The faculty gives members a comprehensive package of essential guidance and technical advice. It produces a monthly newsletter with the latest thinking, technical bulletins and regulatory updates, and member-only events.

Materiality in the audit of financial statements
Published jointly by ICAEW’s International Accounting, Auditing and Ethics (IAAE) and Audit and Assurance Faculty, this guide takes a practical look at the ISA requirements on materiality, highlighting the challenges and providing practical illustrations. Published in June 2017.

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