The materiality of an item of financial information refers to the likelihood that its omission or misstatement would affect the judgments of those relying on that information.This concept most closely relates to the
A)financial magnitude of the item
B)verifiability of the item
C)neutrality of the item
D)feedback value of the item

Question

Quizplus · Accepted Answer

Materiality refers to the financial magnitude of an item and whether its omission or misstatement would affect the judgments of those relying on that information. Verifiability relates to whether the item can be confirmed through independent sources, neutrality refers to the absence of bias or intent to mislead, and feedback value pertains to the ability of the information to provide useful insight beyond its primary purpose.

The Materiality of an Item of Financial Information Refers to the Likelihood