What is most important factor of determining the relevant information?
Materiality is the most important factor for determining the relevance of information.
What are two important factors for determining
Materiality?
The two important factor of materiality are
size and nature of the transaction.
Can nature alone be material?
Yes
nature of transaction can alone be material and may require appropriate
presentation and disclosure in the financial statements.
Do financial statements understanding
require special skills?
Yes
financial statement understanding required basic knowledge of business,
economic and accounting.
Do financial statements provide all
information for economic decision?
No,
financial information does not provide all information required for economic decision.
What is the main information
provided by the financial statements?
Financial
statement provided information about the financial performance (profitability),
financial position and ability of organization generate cash. (Cash flow statements)
Do financial statements provide
reliable information?
It
is assumed that audited financial statement provides the reliable information.
What is materiality?
Information which plays an important role in the economic decision
making.
