Final answer:
The statement is false as significant information that can influence decision-making is considered material, not immaterial. The concept of materiality is essential in many areas including business and finance.
Step-by-step explanation:
The statement is false. Information that is significant enough to make a difference in a decision is considered to be material, not immaterial. The concept of materiality is essential in various disciplines, particularly in business, accounting, and finance. It refers to the significance of information in the context of decision-making. When information is material, it means that its omission or misstatement could influence the decisions that users make on the basis of the reported financial information. Conversely, immaterial information is that which would not be expected to impact a decision-making process greatly. Deciding whether information is material can be subjective and is based on professional judgement.
Materiality is not an absolute threshold but rather a relative concept. Information is considered material if its omission or misstatement could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. In contrast, immaterial information, if omitted or misstated, is not expected to impact the decisions of users.
Therefore, materiality is a critical consideration in financial reporting, as it helps ensure that financial statements provide relevant and reliable information to users, focusing on what truly matters for decision-making