The materiality of a misstatement is based on only the quantitative amount of the misstatement.

Question

Quizplus · Accepted Answer

The materiality of a misstatement is not solely based on the quantitative amount, but also on the nature and context of the misstatement. Other factors such as the purpose of the financial statement, the users' reliance on the statement, and the potential impact on decision-making also need to be considered.

The Materiality of a Misstatement Is Based on Only the Quantitative