Which of the following could exhibit materiality?
A)Information that is misstated
B)Information that is omitted but should be disclosed
C)Information that is disclosed but should be omitted
D)Information that is accurately stated but redundant

Question

Quizplus · Accepted Answer

Materiality refers to the magnitude of an omission or misstatement of information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would have been changed or influenced by the omission or misstatement. Therefore, both misstated and omitted information could potentially have an impact on the decision-making process of a reasonable person and are therefore considered material. Option C, however, refers to potentially immaterial information that could be argued for its disclosure. Option D is accurate but does not have any impact on decision-making and is therefore immaterial.

Which of the Following Could Exhibit Materiality