Question: Material has a different definition in accounting than it does in everyday life. What does material mean in the context of an audit, and who

“Material” has a different definition in accounting than it does in everyday life. What does “material” mean in the context of an audit, and who determines whether an item is material? How does the materiality of an item affect the acceptable and inherent risk borne by an audited company?

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In the context of an audit the term materiality refers to the significance or importance of an item or information in the financial statements An item ... View full answer

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