# Materiality

*Accounting & Reporting — Finicade finance glossary*

Materiality is the threshold above which an error or omission could change a reasonable user's decision. Auditors set a quantitative benchmark — often a small percentage of profit or revenue — but the concept is explicitly qualitative too: a tiny amount that turns a loss into a profit, or that involves fraud by management, is material regardless of size.

**Also known as:** material misstatement, materiality threshold

**Related terms:** [Audit](https://finicade.com/glossary/audit), [Disclosure](https://finicade.com/glossary/disclosure), [Financial Statements](https://finicade.com/glossary/financial-statements), [Internal Controls](https://finicade.com/glossary/internal-controls), [Non-GAAP Earnings](https://finicade.com/glossary/non-gaap-earnings)

Source: https://finicade.com/glossary/materiality