INDICATOR-BASED IMPROVED METHODOLOGY FOR DETERMINING INTERNAL AUDIT SIGNIFICANCE LIMITS IN THE PUBLIC SECTOR
DOI:
https://doi.org/10.5281/zenodo.21177081Keywords:
materiality threshold, internal audit, public sector, base indicator, sector coefficient, materiality memorandum, ISSAI 1320, audit effectiveness.Abstract
The article presents an improved indicator-based methodology for determining the materiality
threshold for internal audit in the public sector. The research problem lies in the absence of a unified and
scientifically grounded procedure for calculating the materiality threshold in national practice. Based on
a systematic approach, comparative analysis, mathematical modelling, and a case study, a five-stage
methodology is developed, and the calculation of the materiality threshold using the formula M = B × C ×
S × A is substantiated. The methodology is tested using the example of a higher education institution, and
differentiated materiality thresholds are calculated for various public sector organizations. The results provide
a practical methodological basis for internal audit services.
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