In 1999, the U.S. Securities and Exchange Commission issued SAB 99-3, which essentially established that no level
Question:
In 1999, the U.S. Securities and Exchange Commission issued SAB 99-3, which essentially established that no level of materiality is acceptable for intentional misstatements involving any registered public U.S. company (e.g., a company opts not to value its marketable securities at market (as required by U.S. GAAP), even if they only constitute two percent of net assets). In contrast, accounting standards issued by standardssetters (including the FASB) contain a disclaimer that "this standard does not apply to immaterial items." Why would the SEC require that companies follow GAAP for immaterial items when the actual standards do not require GAAP to be followed (i.e., there is no GAAP for immaterial items)?
Step by Step Answer:
Auditing Assurance And Risk
ISBN: 9780324313185
3rd Edition
Authors: W. Robert Knechel, Steve Salterio, Brian Ballou