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Guest

Guest (Querist)

16 November 2013 Can you please explain the relationship between Materiality and Risk?

Prashanth

Prashanth (Expert)
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17 November 2013 Hi,

There is a inverse relationship b/w materiality and risk,for e.g.

1."X" have saved Rs.100/-, out of that he lost Rs.3/-,now Rs.3/- is not material to him and risk of getting scoldings from his parents is very low.

2."X" have saved Rs.100/-, out of that he lost Rs.90/-,now Rs.90/- is material to X and risk of getting scoldings from his parents is very high.

Hope you understood !!!