Question

Assume that Rosanne Madden, CPA, is using 5% of net income before taxes, current assets, or current liabilities as her major guidelines for evaluating materiality. What qualitative factors should she also consider in deciding whether misstatements may be material?

Answer 1

Step-by-step explanation:

The accompanying subjective components are to be considered for assessing materiality:

Errors that are minor may be material if there are plausible result emerging from the authoritative commitment.

Errors that are unimportant may be material in the event that they influence a pattern in the income.

Sum including the extortion are generally viewed as significant than accidental mistake proportional to the dollar sum.