Question

How might the materiality threshold level set for negative deviations differ between a small and large business?


Why are the variances from budgets and forecasts important to know?

Answer 1

The materiality threshold level set for negative deviations for a small business will be lower than for a large business.
A budget variance is a periodic measure used by governments, corporations or individuals to quantify the difference between budgeted and actual figures for a particular accounting category.
Source:
https://www.investopedia.com/terms/b/budget-variance.asp