Which of the Following Statements About Materiality Is Correct

question 91

Multiple Choice

Which of the following statements about materiality is correct?

• A) An item must make a difference or it need not be disclosed.
• B) Materiality is a matter of relative size or importance.
• C) An item is material if its inclusion or omission would influence or change the judgment of a reasonable person.
• D) All of these answers are correct.

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Definitions:

Contract Manufacturer

A company hired to produce goods on behalf of another organization, providing specialized manufacturing services.

Bullwhip Effect

A phenomenon where inaccurate or distorted demand information in the supply chain causes drastic swings in inventory levels upstream.

Demand Variability

Fluctuations in customer demand over a period, impacting inventory management, production planning, and supply chain efficiency.