Forming of Opinion based on the audit observations is an important part of any audit, as through this process, the outcome of audit is presented in the form of Audit Report to the intended users. Audit inter alia involve

Materiality consists of both quantitative and qualitative factors. Determining Materiality is a matter of professional judgement and depends on the Auditor's interpretation of the user's needs. A matter can be judged material if knowledge of it is likely to influence the decisions of the intended users. Materiality is a relative concept. In practice, Auditors evaluate materiality on a standalone basis. What is material for one Auditee may not reach the Materiality threshold for another. Materiality is important while conducting the audit process and also while forming the audit opinion based upon the evaluation of conclusions drawn on the basis of the audit process. The Auditor shall consider Materiality while forming his opinion and adhere to: The principle of completeness that requires the Auditor to consider all relevant Audit Evidence before issuing a report; The principle of objectivity that requires the Auditor to apply professional judgement and skepticism in order to ensure that all reports are factually correct and that findings or conclusions are presented in a relevant and appropriate manner; The principle of timeliness that implies preparing the report in due time; and The principle of a contradictory process that implies checking the accuracy of facts and incorporating responses from concerned persons.