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

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

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter9: Operating Activities

Section: Chapter Questions

Problem 2BIC

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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?

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