Etymology of concept «significance» in accounting and auditing

Roman Romanovych Kulyk


In the article the importance of the concept of «significance» in accounting and auditing is considered. The principle of significance in auditing forms the logical sequence and the relationship between the stages of audit, scope and content of audit procedures, evaluation of results of the collected audit evidences and form of audit conclusion.

It has been proved the incorrect use of the concepts «significance» and «essentiality» in the scientific and academic economic literature.

The different definitions of significance, which are similar in content, but do not give to the accountants practical answers for the question of how it should be applied; it is only recognized that the consideration of some information as significant or insignificant one reflects professional judgment (opinion) of an accountant who is responsible for this report, or auditor, who confirms it. This means that auditors should take a convincing and logical form of judgment as for the level of significance.

It has been concluded that because of the double effect of quantitative and qualitative factors the concept of significance is the complicated one to be used in their work. The attempts to establish a single harmonized standard are useless. In addition, the concept of significance has inherent significant subjectivity: a thing that is essential for one auditor is not that  essential for the other one who can appreciate it as useless one.

Therefore, we can recommend to auditors to be more innovative and use unconventional ways that appear as a result of the introduction of new techniques, rules and regulations in accounting and auditing.


significance; essentiality; accounting; audit; judgment; threshold of significance

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Science Works Journal "Ekonomichnyy analiz"

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