Percentage gates feel sophisticated until a small cost center swings 40% on a ₩2 million base while a plant utilities line misses by ₩80 million and stays green at 3%. Absolute thresholds catch the second; relative thresholds catch the first. Most budgeting variance audits need both—layered, not averaged.
Start with materiality in won
Ask what amount would change a board conversation. For many mid-market Korean groups, that sits between ₩15 million and ₩50 million depending on segment. Put that floor into your financial auditing app before percentages exist. Anything below the floor can still be reviewed in sampling, but it should not clog Monday’s queue.
Add relative gates where scale varies
Retail holdcos with dozens of small brands benefit from a 5–8% relative gate above the absolute floor. Manufacturing lines with stable run rates can tighten further. Document the calendar effect: Korean month-ends that fall near holidays inflate accruals; temporary relative relief for two periods is more honest than permanent looseness.
What the app must show
If your tool only stores one threshold type, export both tests offline and reconcile. Instructors in Budget Variance Audit Mastery treat dual testing as non-negotiable—single-metric queues teach the wrong muscle memory.