Materiality in Audit of Financial Reporting Party Conducting Accounting of Joint Activity

The study aims to develop recommendations for auditors in determining the level of materiality in the audit of the financial statements of a legal entity that is a responsible party to the simple partnership agreement. According to the author, for a separate balance sheet and income statement of the joint activity of the participants, the data which are not reflected in the statements of the audited entity conducting the joint activity and its accounting, is reasonable to be included in the calculation of materiality. The joint activity data plays an important role in the preparation of the audit plan, as being unverifiable by external supervisors, except for representatives of the parties under a simple partnership agreement. An auditor applies his/her professional judgment, experience and theoretical knowledge in the field of accounting and taxation of joint activities under a simple partnership agreement, to independently determine the indicators of joint activities that can affect the audited financial statements. The author used the following research methods: analysis, synthesis, observation, experiment and so on, which are based on the practical activities of the author and participation in audits and consultations as an expert. The study allowed recommendations for the auditors to choose indicators of financial statements during the audit, which will allow being cautious in the preparation of the audit report. Scientific novelty is the problem of determining the materiality in the audit in the actual presence of a separate balance sheet of joint activities, the data of which are not included in the audited statements but can affect it.