Which of the following statements about materiality is not correct?
A)An item must make a difference or it need not be disclosed.
B)Materiality is a matter of relative size or importance.
C)An item is material if its inclusion or omission would influence or change the judgment of a reasonable person.
D)All of these are correct statements about materiality.

Question

Quizplus · Accepted Answer

All four statements are correct and consistent with the concept of materiality. Materiality is a fundamental concept in auditing, accounting, and financial reporting, and it refers to the significance, relevance, or importance of an item or piece of information. A material item is one that could affect the decision of a reasonable user of financial statements, and therefore it must be disclosed or presented in a way that allows users to understand its impact. Materiality is a matter of professional judgment, and it involves both quantitative and qualitative factors, such as size, nature, and context of the information. Therefore, all of the statements A, B, C, and D are correct and important to understand the concept of materiality.

Which of the Following Statements About Materiality Is Not Correct