To determine whether or not information is material,paragraph 9 of AASB 1031 indicates that it is material if its omission,misstatement or non-disclosure has the potential,individually or collectively to:
A) affect the discharge of accountability by the governing body of the entity.
B) be greater than 1 per cent of the total assets of the entity.
C) influence management to make decisions which will affect users of the financial report.
D) present the financial report in a "true and fair" manner.
E) deceive the auditors and regulators.

Question

Quizplus · Accepted Answer

Paragraph 9 of AASB 1031 clearly states that information is material if its omission, misstatement or non-disclosure has the potential to affect the discharge of accountability by the governing body of the entity. This means that the information is important enough to influence the decision-making process of the entity's governing body, and therefore should be disclosed in the financial report. The other choices are not relevant to the definition of materiality provided in the standard.

To Determine Whether or Not Information Is Material,paragraph 9 of AASB