Indian Journal of Fundamental and Applied Life Sciences ISSN: 2231– 6345 (Online) An Open Access, Online International Journal Available at http:// http://www.cibtech.org/sp.ed/jls/2014/01/jls.htm 2014 Vol. 4 (S1) April-June, pp. 658-667/Maham et al. Research Article © Copyright 2014 | Centre for Info Bio Technology (CIBTech) 658 DETERMINATION OF MATERIAL AND PERVASIVE MISSTATEMENT IN AUDITING Ke yhan Maham 1 , * Ali Asghar Farajzadeh 2 ,Ghodratollah Talebnia 3 and Akbar Kanani 4 1 Assistant prof. in Accounting, Faculty of management and accounting Qazvin Branch,Islamic Azad University Qazvin, Iran 2 M.S in Accounting ,Ministry of Education ,School District 1-Tabriz, Iran 3 Associate Prof. in Accounting, Science and Research Branch, Islamic Azad University, Tehran, Iran 4 Department of Accounting, Marand Branch, Islamic Azad University, Marand, Iran *Author for Correspondence ABSTRACT The ultimate purpose of this study is to determine the pervasive materiality level. The sample was selected from two groups including certified public accountants employed in Iran Audit Organization (public sector) and other audit institutes (private sector) each sample comprising 60 participants. To collect the data, we used questionnaires composed of two sections, the demography and the questions related to the research. The results indicate that there is a meaningful difference between material and pervasive levels from the viewpoint of active auditors in Audit Organization and certified public accountants in private sectors. This means that there is no consensus between these two groups in determining material and pervasive level. In other words, in determining the pervasive important level, the average viewpoint of auditors in Audit Organization (public sector) in relation to certified public accountants (private sector) is the minimum. The acquired results considered 25% of total average of assets and revenue to determine the pervasive materiality level from the view point of all accountants. Keywords: Pervasive Material Misstatement, Iranian Certified Public Accountant, Audit Organization INTRODUCTION Materiality is one of the most comprehensive and common concepts in accounting and auditing, but with a separate application (Zarrin, 2005; Khathiri, 2002) .Accounting standards often discuss the concept of materiality in the context of the preparation and presentation of financial statements. According to accounting standards and International Financial Reporting Standards (IFRS’s), an issue is considered to be material if it, individually or in the aggregate, could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statement; [9], [13] In auditing standards, misstatement affecting the reports of an independent auditor in the whole group have been categorized as material misstatement but non pervasive as well as material misstatement and pervasive. Naturally, judgment about materiality are made in light of surrounding circumstances and are affected by the size or nature of a misstatement, or a combination of both; [9], [13] , [14] The auditor’s determination of materiality is a matter of professional judgment, and is affected by the auditor’s perception of the financial information needs of users of the financial statement. The concept of materiality is applied by the auditor both in planning and performing the audit, and in evaluating the effect of identified misstatements on the audit and of uncorrected misstatements, if any, on the financial statements and in forming the opinion in the auditor’s report. [9], [13] Generally, determination of materiality levels for financial statement based on certain criteria is a matter of professional judgment. [9], [12], [13] A percentage is often applied to chosen benchmark as a starting point in determining materiality for the financial statement as a whole. [9], [13] Factors that may affect the identification of an appropriate benchmark include the following:  The elements of the financial statement (for example, assets, liabilities, equity, capital, revenue, expenses);