Explain why materiality is important but difficult to apply in practice.

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Social Studies

Shiner

13 October, 19:58

Explain why materiality is important but difficult to apply in practice.

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Alan Hays · Answer 1

Materiality is important because if financial statements are materially misstated, users' decisions might be affected, and therefore cause financial loss to them. It is difficult to apply because quite often there are different users of the financial statments.