If it is probable that the economic decisions of users would have been influenced by the omission or misstatement of information, then that information is:
A) relevant.
B) insignificant.
C) material.
D) significant.

Question

Quizplus · Accepted Answer

Materiality is a key concept in accounting and auditing. Information is considered material if its omission or misstatement could affect economic decisions made by users of the financial statements. Materiality is assessed in terms of both quantitative and qualitative factors, including the nature of the item, the size of the item, and the circumstances surrounding it. If it is probable that an omission or misstatement of information would have influenced economic decisions, then that information is considered material. Therefore, choice C) "material" is the best option.

If It Is Probable That the Economic Decisions of Users