Field notes · 4 November 2025

Materiality on a page a director can see

Materiality, in the auditor’s file, is a threshold. In the board room it is often a rumour. Directors hear that something is “not material” without seeing the number beside the movement they are looking at. The opposite error also happens: a colourful chart of a line that sits well below the threshold, which then consumes the sitting.

A useful page is dull. It states the materiality figure the auditor is using, the basis as described to the committee, and then lists the period’s movements that sit above it. Movements below the line can be named in a short list without drawings. The page does not argue with the auditor’s threshold. If the committee thinks the threshold is too high for related parties or for directors’ pay, that is a committee decision and should be minuted as such, not buried in a graphic.

We have watched sittings in which a GEL 80,000 reclassification was debated for twenty minutes while a revenue pull-forward several times that size sat two tabs back. The fault was the pack, which had given the smaller item a chart because the data were handy. Handy is not the same as material.

If the auditor has not yet locked materiality for the year, say that on the page. Do not invent a substitute figure to make the drawing look finished. An honest blank on that line is better than a decorative percentage.