Question

The fact that a small dollar misstatement (in absolute terms) is likely to influence investment decisions is referred to as?

Answer 1

The fact that a small misstatement (in absolute terms) is likely to influence investment decisions referred to as qualitative materiality factors.

What is Qualitative materiality?

This Can be described as  any suspicion of serious mismanagement, as well as fraud, illegality  and  intentional misstatement or misrepresentation of results or information.

This do focus on the  concerns items that are material by their circumstance,  hence fact that a small misstatement (in absolute terms) is likely to influence investment decisions referred to as qualitative materiality factors.

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