What does the principle of 'materiality' in accounting signify?

The principle of 'materiality' in accounting signifies that financial information must be relevant enough to influence decision-making. This concept ensures that all significant information which could impact the economic decisions of users is included in financial reports. Materiality is about the importance of information in the context of the financial statements; if the omission or misstatement of information could affect users' understanding or financial decisions, that information is considered material.

Materiality is not concerned with providing every single detail or historical data (which is the focus of other principles), nor is it solely about compliance with regulations. Instead, it emphasizes the need for relevance and usefulness of the information presented in the financial reports to stakeholders, thereby aiding in their decision-making processes.