The North Face Case Deals with Materiality and How Auditors

question 20

Multiple Choice

The North Face case deals with materiality and how auditors employ that metric in an audit. The following are all true except:

• A) North Face accounted for barter transactions with full normal margin recognized
• B) Crawford devised the 1997 barter transaction so that it was just beneath the materiality threshold
• C) Crawford followed the GAAP methods that Deloitte suggested
• D) Deloitte proposed an adjusting entry for the 1997 barter transaction, but "passed" on it as immaterial

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