In most companies,variances are investigated only if they exceed a minimum dollar amount or percentage deviation from budgeted amounts.

Question

Quizplus · Accepted Answer

This statement is true. Many companies only investigate variances that exceed a certain dollar amount or percentage deviation from the budgeted amounts. This threshold is often referred to as the materiality threshold, and it is determined by management based on their judgment and the risks associated with the relevant accounts or activities.

In Most Companies,variances Are Investigated Only If They Exceed a Minimum