The Experts below are selected from a list of 360 Experts worldwide ranked by ideXlab platform
William F Messier - One of the best experts on this subject based on the ideXlab platform.
-
Materiality guidance of the major public accounting firms
Auditing-a Journal of Practice & Theory, 2015Co-Authors: Aasmund Eilifsen, William F MessierAbstract:SUMMARY: This paper examines the Materiality guidance for eight of the largest U.S. public accounting firms. Knowledge of how Materiality guidance is integrated into a firm's methodology is import...
-
Materiality guidance of the major public accounting firms
Social Science Research Network, 2014Co-Authors: Aasmund Eilifsen, William F MessierAbstract:This paper examines the Materiality guidance for eight of the largest U.S. and international public accounting firms. Knowledge of how Materiality guidance is integrated into a firm’s methodology is important for accounting and auditing researchers as well as for practitioners, regulators, and educators. Our results show a high level of consistency across the firms in terms of the quantitative benchmarks (e.g., income before taxes, total assets or revenues, and total equity) used to determine overall Materiality, the related percentages applied to those benchmarks, the percentages applied to overall Materiality for determining tolerable misstatement, and what constitutes a clearly trivial misstatement. We also find that the firms’ guidance for evaluating detected misstatements including qualitative factors and firm guidance for group audits is consistent across firms. However, there are differences in how the firms consider the possibility of undetected misstatements when evaluating detected misstatements. The results of this study provide important insights into implementation of standards and valuable information for future research and education.
-
a review and integration of empirical research on Materiality two decades later
Ear and Hearing, 2005Co-Authors: William F Messier, Nonna Martinovbennie, Aasmund EilifsenAbstract:There has been a renewed interest in the concept of Materiality motivated by concerns at the Securities and Exchange Commission, the Sarbanes‐Oxley Act, and the Auditing Standards Board and International Auditing and Assurance Standards Board issuance of proposed standards on Materiality. This paper: (1) reviews and integrates the empirical research on Materiality since 1982, and (2) suggests some implications of this research for audit practice and research. The review indicates that while many issues related to Materiality have been addressed by prior research, a number of new and important areas are in need of further examination.
Aasmund Eilifsen - One of the best experts on this subject based on the ideXlab platform.
-
Materiality guidance of the major public accounting firms
Auditing-a Journal of Practice & Theory, 2015Co-Authors: Aasmund Eilifsen, William F MessierAbstract:SUMMARY: This paper examines the Materiality guidance for eight of the largest U.S. public accounting firms. Knowledge of how Materiality guidance is integrated into a firm's methodology is import...
-
Materiality guidance of the major public accounting firms
Social Science Research Network, 2014Co-Authors: Aasmund Eilifsen, William F MessierAbstract:This paper examines the Materiality guidance for eight of the largest U.S. and international public accounting firms. Knowledge of how Materiality guidance is integrated into a firm’s methodology is important for accounting and auditing researchers as well as for practitioners, regulators, and educators. Our results show a high level of consistency across the firms in terms of the quantitative benchmarks (e.g., income before taxes, total assets or revenues, and total equity) used to determine overall Materiality, the related percentages applied to those benchmarks, the percentages applied to overall Materiality for determining tolerable misstatement, and what constitutes a clearly trivial misstatement. We also find that the firms’ guidance for evaluating detected misstatements including qualitative factors and firm guidance for group audits is consistent across firms. However, there are differences in how the firms consider the possibility of undetected misstatements when evaluating detected misstatements. The results of this study provide important insights into implementation of standards and valuable information for future research and education.
-
a review and integration of empirical research on Materiality two decades later
Ear and Hearing, 2005Co-Authors: William F Messier, Nonna Martinovbennie, Aasmund EilifsenAbstract:There has been a renewed interest in the concept of Materiality motivated by concerns at the Securities and Exchange Commission, the Sarbanes‐Oxley Act, and the Auditing Standards Board and International Auditing and Assurance Standards Board issuance of proposed standards on Materiality. This paper: (1) reviews and integrates the empirical research on Materiality since 1982, and (2) suggests some implications of this research for audit practice and research. The review indicates that while many issues related to Materiality have been addressed by prior research, a number of new and important areas are in need of further examination.
Bruce W Johnson - One of the best experts on this subject based on the ideXlab platform.
-
Materiality decisions and the correction of accounting errors
The Accounting Review, 2009Co-Authors: Andrew Acito, Jeffrey J Burks, Bruce W JohnsonAbstract:ABSTRACT: We test conjectures about the determinants of Materiality judgments by examining a financial reporting choice made by firms that discover errors in prior years' financial statements. From late 2004 to mid‐2006, more than 250 U.S. firms uncovered and corrected operating lease accounting errors either by formal restatement—required for errors deemed material—or by a less visible current‐period “catch‐up” adjustment. We test the role of Materiality considerations outlined in SAB No. 99 as well as factors outside authoritative guidance in explaining the correction method chosen. Although both quantitative and qualitative Materiality considerations cited in the guidance explain a large portion of the variation in firms' error correction decisions, we find that the prior actions of other firms also appear to play a major role. We also find that clerical considerations, but not strategic disclosure concerns, help explain cross‐sectional variation in the timing of firms' error correction announcements.
-
Materiality decisions and the correction of accounting errors
Social Science Research Network, 2008Co-Authors: Andrew Acito, Jeffrey J Burks, Bruce W JohnsonAbstract:We test conjectures about the determinants of Materiality judgments by examining a financial reporting choice made by firms that depends on an underlying Materiality assessment. Specifically, from late 2004 to mid 2006, over 250 firms were required to correct errors in their accounting for operating leases. The method chosen to correct the errors reflects the assessed Materiality of the errors, as restatements are required to correct material errors while catch-up adjustments can be used to correct immaterial errors. We test the role of Materiality considerations outlined in authoritative guidance as well as factors outside the guidance in explaining the correction method chosen. We find that quantitative and qualitative Materiality considerations cited in authoritative guidance explain a large portion of the variation in firms' error correction decisions. We also find that firms base their decisions on those of other firms.
Andrew Acito - One of the best experts on this subject based on the ideXlab platform.
-
Materiality decisions and the correction of accounting errors
The Accounting Review, 2009Co-Authors: Andrew Acito, Jeffrey J Burks, Bruce W JohnsonAbstract:ABSTRACT: We test conjectures about the determinants of Materiality judgments by examining a financial reporting choice made by firms that discover errors in prior years' financial statements. From late 2004 to mid‐2006, more than 250 U.S. firms uncovered and corrected operating lease accounting errors either by formal restatement—required for errors deemed material—or by a less visible current‐period “catch‐up” adjustment. We test the role of Materiality considerations outlined in SAB No. 99 as well as factors outside authoritative guidance in explaining the correction method chosen. Although both quantitative and qualitative Materiality considerations cited in the guidance explain a large portion of the variation in firms' error correction decisions, we find that the prior actions of other firms also appear to play a major role. We also find that clerical considerations, but not strategic disclosure concerns, help explain cross‐sectional variation in the timing of firms' error correction announcements.
-
Materiality decisions and the correction of accounting errors
Social Science Research Network, 2008Co-Authors: Andrew Acito, Jeffrey J Burks, Bruce W JohnsonAbstract:We test conjectures about the determinants of Materiality judgments by examining a financial reporting choice made by firms that depends on an underlying Materiality assessment. Specifically, from late 2004 to mid 2006, over 250 firms were required to correct errors in their accounting for operating leases. The method chosen to correct the errors reflects the assessed Materiality of the errors, as restatements are required to correct material errors while catch-up adjustments can be used to correct immaterial errors. We test the role of Materiality considerations outlined in authoritative guidance as well as factors outside the guidance in explaining the correction method chosen. We find that quantitative and qualitative Materiality considerations cited in authoritative guidance explain a large portion of the variation in firms' error correction decisions. We also find that firms base their decisions on those of other firms.
Zoevonna Palmrose - One of the best experts on this subject based on the ideXlab platform.
-
the effect of quantitative Materiality approach on auditors adjustment decisions
Accounting review: A quarterly journal of the American Accounting Association, 2005Co-Authors: Mark W Nelson, Steven D Smith, Zoevonna PalmroseAbstract:Two alternative approaches are used in audit practice to provide quantitative Materiality assessments about proposed audit adjustments. The cumulative approach compares to net income the total amount of misstatement existing at the end of the current period, while the current‐period approach compares to net income the amount of misstatement added in the current period. Depending on the relation between total misstatement and current‐period misstatement, either the cumulative approach or the current‐period approach can calculate higher quantitative Materiality. This paper reports an experiment that varies Materiality approach between auditors by providing auditors with either the current‐period or cumulative formats used by their firm to summarize proposed audit adjustments. Results indicate that, across a variety of experimental contexts (varying misstatement size, subjectivity, precision, and income effect, and varying whether auditors document effects on their client's quality of earnings), auditors are...
-
the effect of quantitative Materiality approach on auditors adjustment decisions
Social Science Research Network, 2005Co-Authors: Mark W Nelson, Steven D Smith, Zoevonna PalmroseAbstract:Two alternative approaches are used in audit practice to provide quantitative Materiality assessments about proposed audit adjustments. The cumulative approach compares to net income the total amount of misstatement existing at the end of the current period, while the current-period approach compares to net income the amount of misstatement added in the current period. Depending on the relation between total misstatement and current-period misstatement, either the cumulative approach or the current-period approach can calculate higher quantitative Materiality. This paper reports an experiment that varies Materiality approach between auditors by providing auditors with either the current-period or cumulative formats used by their firm to summarize proposed audit adjustments. Results indicate that, across a variety of experimental contexts (varying misstatement size, subjectivity, precision and income effect, and varying whether auditors document effects on their client's quality of earnings), auditors are more likely to require their client to book the misstatement under the approach that makes the misstatement appear more material. These results suggest that standard setters mandate that auditors require adjustment whenever a misstatement is material under either approach.
