In determining whether an item is material, consideration must be given to:

Question

Quizplus · Accepted Answer

Both the size and nature of an item must be considered in determining its materiality. A small item may be material if it has a significant impact on the financial statements, and a large item may not be material if it is insignificant in relation to the overall financial picture. Similarly, the nature of an item must be considered, as some items may have a greater impact on the financial statements than others of similar size.

In Determining Whether an Item Is Material, Consideration Must Be