Materiality
Whether omission or misstatement could influence users' decisions.
An entity-specific aspect of relevance: information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that primary users make on the basis of the financial statements.
Passende Übungsfragen
☝️ Single
Which two qualitative characteristics does the Conceptual Framework identify as the FUNDAMENTAL characteristics of useful financial information?
Prudence and materiality
Timeliness and understandability
Comparability and verifiability
Relevance and faithful representation
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✌️ Multi
Which TWO of the following are ENHANCING qualitative characteristics of useful financial information under the Conceptual Framework?
Materiality
Relevance
Comparability
Faithful representation
Timeliness
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☝️ Single
Which statement best describes information that is MATERIAL under the Conceptual Framework?
Information is material if it exceeds 5% of profit before tax in every circumstance
Information is material if it has been audited and reported on by the external auditor
Information is material if omitting, misstating or obscuring it could reasonably be expected to influence the decisions of the primary users
Information is material only if it relates to transactions with directors
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