The Concept of Materiality

question 25

Multiple Choice

The concept of materiality:

• A) Treats as material only those items that are greater than 2% or 3% of profit.
• B) Justifies ignoring the matching principle or the recognition principle in certain circumstances.
• C) Affects only items reported in the income statement.
• D) Results in financial statements that are less useful to decision makers because many details have been omitted.

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Definitions:

Ethical Violations

Actions or behaviors that break professional conduct codes or moral principles in a specific context.

Alice Goffman

A sociologist known for her ethnographic work and research on crime, criminal justice systems, and their impacts on African American communities.

James Coleman

An American sociologist known for his work in educational sociology and for developing the Coleman Report, which examined educational equality in the United States.

Value-Free Sociology

An ideal whereby researchers identify facts without allowing their own personal beliefs or biases to interfere.