Case 4.2 - Jason Wilcox Case 4.2 Accounting Spring 2009 A....

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Jason Wilcox Case 4.2 Accounting Spring 2009 A. 1 . The matter of materiality is based on professional judgment because it is up to the accountant to determine in the dollar amount is significant enough to report or to just ignore. If the amount of money is less than two percent of the net income, than it is considered immaterial by most accountants and based on certain factors. However an example of materiality that would not be excusable is if employees are stealing money from the company but in amounts that do not exceed 2-3% of the business net income. An accountant should not overlook materiality and use good judgment on determining whether or not the amounts should be included or not. 2. Some of the criteria that should be examined when considering whether or not a transaction is material or not is by looking at previous financial statements as well as how the business is operating at the present time. If an accountant wants to estimate a utility bill for example then they need to consider whether the rates are still the same
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Case 4.2 - Jason Wilcox Case 4.2 Accounting Spring 2009 A....

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