Introduction

1. Materiality refers to the nature of a transaction or an amount and includes many financial and non-financial transactions that, independent of the amount, may help the users with the decisions/with an overview of the materiality.
   
2. Materiality needs to be set up as one-time activity at the admin level and then can be changed for specific funds as required.
3. Materiality is available for all the Funds on Fund Dashboard. Following is the informative data available on the Materiality page.
   
4. Materiality assessment here is divided into 4 parts, Overall Materiality, Classes, Performances, and Trivial. following is the in-depth information about the types of Materiality.
   

Overall Materiality

1. Determine whether one or several benchmarks will be used to determine overall materiality. When considering the level of materiality, take into consideration what threshold (value of misstatement) or omission one could reasonably expect would influence the trustee's decision about the financial report information.
   
2. Trustees monitor the value, liquidity, and composition of the assets they base their investment decisions on.
   
3. Trustees monitor the Fund’s investment performance taking into consideration, the anticipated needs of its members and the risk involved in making, changing, or holding an investment.
   
4. For this reason, Total Assets are a reasonable base to use in which to calculate materiality.
   
5. Overall Materiality can be set on any of below:
   
1. $ Amount
   
2. % of Total Gross Assets
   
3. % of Member Entitlements
   

Classes Of Balances

1. It may be necessary to adjust Total Assets for significant investment movements during the period. Consider if specific materiality is required about other account balances or transactions:
   
2. Particular classes of assets requiring a high level of judgment and estimation for the market value of assets (collectibles & personal use assets) where a high degree of judgment and estimation may be involved in the valuation of the assets
3. Where there is significant activity during the year about contributions may instigate the need to focus attention on investigating specific transactions. In evaluating whether an item is material, the auditor should consider not only the monetary value but also the nature of the omission or misstatement, in circumstances where an error or omission may impact a silent trustee, consider whether the correction of an immaterial adjustment is still required.
   
4. Classes of balances can be set on any of the below:
1. Income
2. Expenses
3. Payables
   

Performance Materiality

1. It is set by the auditor at a lower amount than materiality for the financial report as a whole to reduce the probability that undetected misstatements exceed materiality for the financial report as a whole. The auditor should consider whether performance materiality will be set high (90% of Overall Materiality) or a lower level (75% of Overall Materiality). A lower level of performance materiality (where the risk is higher) will increase the extent of testing. There are instances where a Fund has a small number of transactions or where specific transactions are targeted (regardless of their value) due to the risk of non-compliance with SISA and SISR. In these instances, it may be appropriate that the level of performance materiality is the same or set at high in comparison to the Overall Materiality
   
2. Based on professional judgment, Performance materiality is calculated and is to be determined concerning the following factors:
1. History of audit work undertaken for the client previously,
2. Number and nature of errors found in previous audit work for the client.
   
3. The general expectation is that undetected errors may exist in the information being audited.
   
4. Performance Materiality can be set on % of Overall Materiality.
   

Trivial Balances

1. The balances are of little or no importance.
   
2. Amounts, below which, are to be considered trivial, can be set on any of below:
   
1. % of Overall Materiality
2. % of any account balance
   

Note: In account balance, the account refers to the lead schedule.