The Materiality Constraint

question 85

Multiple Choice

The materiality constraint:

• A) is only relevant when preparing annual financial statements as opposed to quarterly statements.
• B) is applicable only for low-cost items that cost less than, say, $500.
• C) is the only defence for gross negligence by an independent accountant.
• D) does not necessarily imply that an immaterial amount can be ignored for accounting purposes.

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Definitions:

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Diplomacy

The management of international relations by negotiation and dialogue between countries.

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The spread of nuclear weapons and technology to nations not recognized as Nuclear Weapon States by the Treaty on the Non-Proliferation of Nuclear Weapons.

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