ACCA Strategic Professional · Advanced Performance Management · Sustainability
Marlow Group is designing a sustainability report. The finance director wants the report to cover only those matters that could reasonably influence the decisions of stakeholders, rather than every environmental or social item the company can measure. Which reporting principle is the director applying?
The director is applying materiality, which limits the report to matters significant enough to influence stakeholder decisions or reflecting major impacts. Comparability, timeliness and verifiability concern consistency, release timing and checkability, and do not determine which topics are included.
- AMaterialityCorrect
- BComparability
- CTimeliness
- DVerifiability
Explanation
Materiality means including the topics that are significant to stakeholders' decisions or reflect significant impacts of the organisation. Comparability concerns consistency across periods or entities, timeliness concerns when information is issued, and verifiability concerns whether information can be checked. None of these is about selecting topics by significance.
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