Materiality deals with the size of an error in accounting information.

Question

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Materiality is the concept that determines whether a particular item or information is important enough to influence the decision-making process of financial statement users. It takes into account the size or amount of an error, omission or misstatement in accounting information. In other words, materiality assesses the impact or significance of errors on financial statement users' decisions.

Materiality Deals with the Size of an Error in Accounting