The Role of Materiality Guidance in Rationalizing Professional Judgments Associated with Materiality Decisions

This study aims to identify the problems of applying materiality concept, in addition to trying to propose a treatment for these problems by proposing and preparing a Professional guidance to guide the preparers when issuing their Professional judgments related to the concept of materiality. To verify the validity of the study hypotheses, researcher prepared a survey list consisting of sixteen questions, and the survey list was directed to four categories: Investment Fund Officials, Account Heads and Managers, Accredited Audit Offices, Academics Specializing in Financial Accounting. Researcher received responses to 69 lists out of a total of 95 lists with a response rate of 72.63%. to verify the validity of the study hypotheses, statistical analysis was performed using descriptive statistics as well as statistical analysis using the Chi-Square Test. In addition, the Krusskal-Wallis test was performed to determine the extent of differences between the opinions of the study categories, and the tests showed that there were no differences between the opinions of the five study categories when answering the axes of the survey list, with the exception of limited exceptions that were interpreted in favor of the opinions of the audit offices in first and second hypotheses, and in favor of the opinions of heads and account managers regarding the fourth hypothesis.The study represents a contribution to accounting literature by identifying the problems of applying the concept of materiality, and trying to treat these problems by proposing and preparing a Professional guidance to guide the preparers when issuing their Professional judgments related to the concept of materiality. Finally, the research represents Contribution to the existing trend towards increasing the link between accounting research and the actual problems facing financial reporting preparers in the practice environment.

Keywords: excessive disclosure, investor perspective, materiality, professional guidance, professional judgment, qualitative assessment, quantitative assessment