Hi sir,
Regrding materiality threshold.
Should we compare each figure for example ( deffered income) to all total assets/revene and profit?
Ask the Tutor ACCA AAA
Materiality
8y ago#1No - materiality of a monetary amount is only meaningfully assessed against a RELEVANT parameter. For example, failure to provide for a liability means that expenses are understated - it makes no sense to measure this against revenue or total assets as it affects only profit - so it should be calculated only as a % of profit to determine if the misstatement is material.
Sign into reply to this topic.