As Alan Watts titled a book, “Does it matter?”
Contrary to what you may think, accountants don’t strive to account for every penny. They strive to present a fair picture of an organization’s financial condition, not to balance its checkbook.
If your employer is auditing your expenses, a $300 discrepancy on your hotel bill is probably significant; it’s “material.” If Deloitte is auditing Exxon, a $5 million discrepancy in expense reimbursements is trivial — it’s a drop in the bucket that won’t even show up on Exxon’s financial statements.
I interpret the Principle of Materiality as “Don’t sweat the small stuff.” Don’t fixate on false accuracy. And if you’re unsure whether or not something’s material, change its value up or down to see if it makes a meaningful difference. Impress your friends by saying you’re performing a “sensitivity analysis.”
