Question

“The concept of materiality and the concept of consistency are two pillars of

accounting” – Substantiate this statement​

Answer 1

Explanation:

The given statement is indeed true.

In accounting, materiality concept is about the relevance of information, and the volume of transactions that appear in the financial statements. It is important that all the transactions should be materialised in the reports.

Consistency in accounting is how reliable or correct the information is being recorded. When these two principles are obeyed, then the records are kept in true condition

Answer 2

Both concepts are pillars of accounting as they focus on the overall impact being put on the business.

• According to the materiality, an accounting requirement must be omitted if the total effect on financial statement is so minimal that the financial statements auditor will not be deceived.
• Consistency principle refers to the requirement of accounting procedures being implemented uniformly in future.
• When an accounting policy is changed for some cause, the motive and reason of change and the impact on financial reporting items must all be disclosed.
• Both the concepts focus towards ensuring the proper flow and record of information to influence various management decisions.