Accounting Materiality in the Real World

Abstract

The last part of the book wraps up the whole content in showing how an experienced professional can handle discussions with management to uncover inappropriate schemes, manipulation tactics, if not frauds.

It first reports the predominant idea that today’s issue about materiality is simply behavioral or concerns implementation issues. It then moves to the observation of illegitimate use of materiality in the real world to manipulate financial results.

It then goes through an illustration of SEC staff’s comments on materiality in the review of Form 20-F of foreign private issuers reporting under IFRS.

Finally, the part spells out typical materiality abuses by management, which can be found in practice. Each occurrence of this long list is linked to the respective part of the book that treats the theoretical bases of why a certain reasoning is a fallacy, and the specific pronouncements that such a behavior would contravene.

Citation

Bellandi, F. (2017), "Accounting Materiality in the Real World", Materiality in Financial Reporting, Emerald Publishing Limited, Leeds, pp. 347-372. https://doi.org/10.1108/978-1-78743-736-420171017