If a misstatement on financial statements is so significant that reasonable, prudent users of the financial statements would make a different decision than they would if they had been given correct information, then the misstatement is material and requires correction.

Question

Quizplus · Accepted Answer

This statement is true. Materiality is a concept in accounting and auditing that relates to the significance of an item or event on a company's financial statements. If a misstatement on financial statements is material, it must be corrected in order to ensure that users of the financial statements can make informed decisions based on accurate information.

If a Misstatement on Financial Statements Is So Significant That