Question to the Ministry of Housing, Communities and Local Government:

To ask Her Majesty's Government what rules apply to the setting of a level of materiality in local authority audits; who enforces those rules; and whether a level of materiality in excess of ten per cent of a council’s annual turnover is unusual.

Local authority auditors are required to comply with International Auditing Standards (IAS) when they set materiality thresholds for local authority audits. IAS 320 states that the auditor's determination of materiality is a matter of professional judgement and it explains that misstatements, including omissions, are considered to be material if they, individually or in the aggregate, could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements

It is not our role to make a judgement on whether the materiality level set by an auditor is unusual or not. However, when setting the materiality level, the auditor should ensure their judgement is justified transparently including a demonstration of how they have designed their audit work to suit the structure and operations of local authorities

If a person wants to make a complaint about the work of an auditor, in the first instance they should complain directly to the senior audit partner using the firm's complaint processes. Auditors are obligated to consider all complaints. Following that, if the complaint is not resolved, further escalation can be made to the auditor's Responsible Supervisory Body (RSB).