Day: October 1, 2025

For each of the following statements, select whether they are true or false with respect to the concept
of materiality.

a. Materiality depends only on the monetary amount of an item.
b. Materiality may depend on either the nature of an item or its monetary amount.
c. Materiality is a matter of professional judgement.

Are these cases True or False?

Select ONE answer:

1. a. True – b. True – c. True
2. a. False – b. True – c. True
3. a. False – b. False – c. True
4. a. False – b. False – c. False

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct => a. = False – materiality can be both quantitative and qualitative. b. = True – materiality may depend on either the nature of an item or its monetary amount. c. True – materiality is determined by the external auditor, and he will use his professional judgement in setting a level of materiality which best addresses the audit risk.
3. Not correct
4. Not correct

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