Materiality thresholds

Define materiality levels that guide review focus and reporting considerations. Zato provides control through two settings: GL Codes Materiality and GST-Specific Materiality.

GL codes materiality

• Transactional threshold: Flags any single transaction exceeding your chosen dollar value.
• Aggregate threshold: Evaluates the cumulative total of transactions within a specific account code. If the total exceeds the limit, the account is flagged.
• High-value transactions: Highlights unusually large entries outside the norm.

Default values ($20, $100, $1,000) are provided. Users may enter custom values.

GST-specific materiality

• GST Transactional Threshold: Looks at the GST adjustment amount for an individual entry.
• GST Aggregate Variance: Assesses the combined value of all GST adjustments within a single GST period.
• GST High-Variance Flags: Alerts to significant spikes or unusual variances that may indicate a coding error.

GST journal logic

Zato determines if a GST journal is necessary using this logic (example: $20 transaction threshold, $100 aggregate threshold):

• Individual GST adjustments under $20 are considered immaterial.
• If the total of all small adjustments (under $20) is less than $100 for the period, no GST journal is required.
• Zato auto-generates GST journals if a single adjustment is $20 or more, OR if the combined total of all small adjustments reaches or exceeds $100.