Which one of the following statements is correct concerning the concept of materiality?
A) Materiality is determined by reference to guidelines established by ASIC.
B) Materiality depends only on the dollar amount of an item relative to other items in the financial report.
C) Materiality depends on the nature of an item rather than on the dollar amount.
D) Materiality is a matter of professional judgment.

Question

Quizplus · Accepted Answer

Materiality is a matter of professional judgment and depends on the circumstances and context of the item being considered. There are no specific guidelines established by ASIC, and materiality is not determined solely by the dollar amount of an item. The nature of the item and its impact on users' decisions are also important factors in determining materiality.

Which One of the Following Statements Is Correct Concerning the Concept