Materiality:
A) means exercising due care and caution.
B) provides a cut-off point in determining whether information is relevant.
C) is linked to the qualitative characteristic of faithful representation.
D) means attention to detail.

Question

Quizplus · Accepted Answer

Materiality provides a cut-off point in determining whether information is relevant. Materiality refers to the idea that certain information could be considered important enough to influence a decision or judgment, while other information may not be as significant. Therefore, materiality helps in determining what information should be disclosed or included in financial statements, and what information should be excluded. Materiality is a key concept in accounting and auditing.