Question: Select the statement that is most accurate with regard to materiality. 1. Materiality does not create discretionary choices for managers, executives, and auditors. 2. Earnings

Select the statement that is most accurate with regard to materiality.
1. Materiality does not create discretionary choices for managers, executives, and auditors.
2. Earnings management is not sufficiently material to constitute fraud.
3. Materiality is based on a percentage of net sales.
4. Materiality includes both quantitative and qualitative factors.

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