Materiality can be defined as the magnitude of an omission or misstatement of information. Comment and list out any four principles which the auditor should adhere while forming his opinion.

The assessment of what is material is a matter of professional judgement. Materiality can be defined as the magnitude of an omission or misstatement of information that, in the light of surrounding circumstances, makes it probable that the judgement of a reasonable person relying on the information would have been changed or influenced by the said omission or misstatement. As the concept of Materiality is applied by the Auditor both in planning and performing the audit, and forming the opinion. 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 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 a matter of professional judgement of the Auditor and its teams' experience. Materiality is the threshold above which missing or incorrect information is considered to have an impact on the decision making of the Auditor. Information is considered as material if its omission or misstatement could influence the opinion of the Auditor. Materiality can also be construed in terms of net impact. The Auditor shall consider materiality while forming his opinion and adhere to following principles: 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 professional 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.