The International Accounting Standards Board's (IASB) Conceptual Framework Includes a Materiality

question 118

Multiple Choice

The International Accounting Standards Board's (IASB) conceptual framework includes a materiality constraint. Which of the following is true regarding this constraint?

• A) The IASB's rule for materiality is any item under 5% of net income is considered immaterial.
• B) Materiality factors into both internal and external accounting decisions.
• C) An item is immaterial if its inclusion or omission would influence or change the judgment of a reasonable person.
• D) All of the choices are correct.

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