Which statement about materiality determination is true?

Which statement about materiality determination is true?

• A. Materiality is fixed by GAAP and does not involve professional judgment.
• B. Materiality is determined only by the magnitude of misstatements.
• C. Determination of materiality requires professional judgment and considers both quantitative and qualitative factors.
• D. Materiality is determined solely for financial statements, not for classes of transactions.

Answer: (C)