The CPA Journal, June 1st, 2001
In Brief
Clarifying a Complex Relationship
No GAAP pronouncements quite match those that require probability assessments for evoking the ire of the accountants that must apply them. Nonetheless, there is an inherent relationship between probability and materiality, inescapable for accurate financial reporting and auditing. However, I.S. and international standards arc so imprecise that quantitative applications are rare. The authors analyzed over 3,000 documents from seven English-speaking countries, as well as international pronouncements, and found that the language of likelihood varies gr...
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