Codification Chapter 2 - PROFESSIONAL RESEARCH Search...

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PROFESSIONAL RESEARCH Search Strings : concept statement, “materiality”, “articulation” (a) According to Concepts Statement 2 (CON 2): Qualitative Characteristics of Accounting Information, “Glossary”: “Materiality is defined as the magnitude of an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would have been changed or influenced by the omission or misstatement.” (b) CON 2, Appendix C—See Table 1—refers to several SEC cases which apply materiality. Students might also research SEC literature (e.g. Staff Accounting Bulletin No. 99), although SEC literature is not in the FARS database. SFAC No. 2, 128. provides the following examples of screens that might be used to determine materiality: “ a. An accounting change in circumstances that puts an enterprise in danger of being in breach of covenant regarding its financial condition may justify a lower
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Codification Chapter 2 - PROFESSIONAL RESEARCH Search...

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