Managing Materiality Level

When Mamut Validis carries out an analysis of your accounting data, it examines each transaction and stores the result of every test it performs. Depending upon the quality of the data it is asked to examine, the analysis may identify a large number of potential anomalies. However, it is likely that most of these anomalies will involve small amounts, which may not be of particular interest to you.

If you find that Mamut Validis is being too sensitive, and is reporting a large number of potential anomalies, you can adjust the materiality value so that it generates a more manageable number of items for you to investigate. Items which fall below your materiality value are not shown individually in the Mamut Validis displays, but are grouped together under the description "Below materiality threshold".

You can set the materiality value to be:

A defined percentage of Turnover, Pre-tax Profit, or Total Assets. The default percentages used by Mamut Validis (1%, 2% and 10% respectively) are those typically used by auditors and are provided as guidelines.
Whichever is the largest of these three values.
A fixed value. For example, a materiality level of €99.99 would allow you to view all issues identified by Mamut Validis with a value of €100 or more.

You can also disable materiality altogether. This will enable you to see all the potential anomalies in your accounting data which have been identified by Mamut Validis.

How to change your materiality level

The preferred materiality level can be defined in the Data Analysis section. The filter can be found in the section Summary Analysis in the analysis categories Accounting Rules, Trends, Exceptional Values, Unusual Combinations. It can also be accessed from the Profit & Loss Issues and/or Balance Sheet Issues screens.

Click the report that you wish to display.
In the bottom half of the screen, under Analysis Results, click on Edit beside Materiality. Here you are able to set the materiality level.
Use the drop-down box to select the preferred materiality value.

Manual Materiality: Type the minimum value you wish to use into the adjacent value field.

Turnover: Enter the materiality level as a percentage of the turnover. The variance will be calculated as a percentage of the turnover and compared to the materiality level you enter here. If a variance does not reach the defined materiality level, it will not be included in the report.

Pre Tax Profit/Loss: These settings are pre-set with guideline percentages used by accountants in practice. These percentages can be adjusted by the user if appropriate. Enter the percentage figure you wish to use in the adjacent value field.

Use the largest resulting value. This value is based on the largest calculation taken from the guideline percentages.

No materiality filtering: Disabling materiality altogether will enable Mamut Validis to detect every single anomaly which is returned for review.
Set the materiality for the specific analysis that is being reviewed, or you can apply it across all analysis views by checking the box Apply to all views.
Once complete, click on the button Apply to save your new comment; or use the Cancel button to discard it.

Any change you make is applied immediately to your Mamut Validis results.