Section A

Under the Conceptual Framework, what is the term used to describe the threshold above which missing or misstating information could influence the decisions of primary users of financial statements?

How to approach this question

Identify the concept that deals with the significance or size of an item in the context of financial reporting.

Full Answer

Materiality is an entity-specific aspect of relevance. Information is material if omitting, misstating, or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those reports.

Common mistakes

Confusing it with 'Relevance' (which is the broader qualitative characteristic).

Question 19 All questions Question 21

Practice the full ACCA FA — Financial Accounting Practice Exam 6

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