materiality principle


An accounting principle that states that financial reports only need to include information that will be significant (material) to their users. For example, an audit report would not need to specify the number of paper clips used by a bank. For a large corporation, an expenditure of a few thousand dollars would not be material, but for a smaller company it might be.

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You should try and figure out a way to make the materiality principle work in the best interests of your company.

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The materiality principle was cool because it was important to only use the information we needed to help with others.

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They did not send the investors all of the documents as they felt the materiality principle meant that they only needed to see what was important to them.

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