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How do **auditors determine materiality**? To establish a level of **materiality**, **auditors** rely on rules of thumb and professional judgment. They also consider the amount and type of misstatement. The **materiality** threshold is typically stated as a general percentage of a specific financial statement line item.

The **aim** of **performance materiality**, therefore, is to further reduce the probability that the uncorrected misstatements (in totality) exceeds financial statement **materiality** (i.e. its intention is a ‘catch all’ **materiality**).

**Mean deviation** can give us a sense of how much data is dispersed from one of the average measurements (**mean**,mode,median). **Mean deviation** depends on the difference between the data and the average measurement. … Rather it is completely controlled by the data differences from the average value.

**Mean** absolute **deviation** (MAD) of a data set is the average distance between each data value and the **mean**. **Mean** absolute **deviation** is a way to describe variation in a data set. **Mean** absolute **deviation** helps us get a sense of how “spread out” the values in a data set are.

**Merits and Demerits of Mean Deviation** in Business Cycle

- As in case of X, every term is taken in account hence, it is certainly a better measure than other measures of dispersion i.e. Range, Percentile Range or Quartile Range.
**Mean deviation**is extensively used in other fields such as Economics, Business, Commerce or any other field of such type,

The difference between the two norms is that the **standard deviation** is calculating the square of the difference whereas the **mean** absolute **deviation** is only looking at the absolute difference. Hence large outliers will create a higher dispersion when using the **standard deviation** instead of the other method.