Materiality refers to
A) the tangible nature of an item.
B) representational faithfulness.
C) the decision-making relevance of a piece of information.
D) None of these describe materiality.

Question

Quizplus · Accepted Answer

Materiality refers to the significance or importance of a financial item or piece of information in the context of decision-making. It is a concept used in auditing, accounting, and financial reporting to determine the level of detail and scrutiny required for different types of transactions and events. In other words, materiality is a relative measure of the impact that an item or disclosure can have on the financial statements or on the users of those statements. A material item is one that, if misstated or omitted, could affect the decisions of a reasonable user of the financial information.

Materiality Refers to