Materiality principle in accounting

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Materiality principle: This principle requires that the items or events having an insignificant economic effect or not being relevant to the user’s need not be disclosed. In other words, only significant items should be considered when preparing financial statements.

Significant (material) items are those items whose omission or nondisclosure will result in misleading the users of those financial statements.

Author: amidu edson

I am certified accountant with more than 5 years of teaching experience. Currently am teaching auditing and assurance, management accounting and financial accounting for student preparing for professional exams such as ACCA and CPA.

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