In auditing, the concept of trivial refers to an item or matter that is insignificant or immaterial, and therefore does not require further attention or audit procedures.
An item or matter is considered trivial if it is small in relation to the overall size and nature of the financial statements, and if it does not have a significant impact on the financial statements. An item or matter is considered trivial if it is not material, and if it is not indicative of a potential material misstatement or error in the financial statements.
The determination of triviality is based on the auditor’s professional judgment, and takes into account the auditor’s assessment of the risks of material misstatement and the auditor’s tolerance for misstatements in the financial statements. The determination of triviality should be made on a case-by-case basis, and should be documented in the audit working papers.
For example, if an auditor is reviewing the accounts payable balance for an entity, and the auditor determines that a small account payable balance of $50 is not material and does not have a significant impact on the financial statements, the auditor may consider the account payable balance to be trivial and may not perform further audit procedures on the account.
Overall, the concept of triviality is an important concept in auditing, as it allows the auditor to focus on items or matters that are significant or material, and to avoid spending unnecessary time and resources on immaterial items or matters. The determination of triviality should be based on the auditor’s professional judgment, and should be documented in the audit working papers.
