Answer to Question #238400 in Management for nee

Question

What is a materiality threshold, and how might the level set for negative deviations differ between small and large business?

Answer 1

For negative deviations, the materiality threshold level determined for a small business will be lower than for a large business. A budget variance is a recurring metric that governments, organizations, and individuals use to quantify the difference between budgeted and actual statistics for a certain accounting category.