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One of the Five Techniques of Earnings Management Identified by the Securities

question 19

Essay

One of the five techniques of earnings management identified by the Securities and Exchange Commission relates to materiality.Independent auditors have traditionally used arbitrary quantitative benchmarks to define how large an amount must be to be considered material.
During the course of auditing the financial statements of a company,an auditor finds some misstatements in the client's financial statements.When combined,the misstatements,result in a 4% overstatement of net income and a $.02 (4%)overstatement of earnings per share.The auditor's materiality threshold is 5%,that is,an item in the financial statements must be misstated by more than 5% to be considered a material deviation from generally accepted accounting principles.On the basis of the established materiality threshold,the auditor concludes that the deviation from GAAP is immaterial and the accounting is permissible.
Define the term "materiality" and explain whether the auditor is justified in the conclusion that the accounting proposed by the client is permissible.

Identify the functions and characteristics of different types of blood cells.

Understand the processes and factors involved in blood clotting and anticoagulation.

Describe the role and mechanisms of the immune system in defending against infections.

Explain the production and significance of red blood cells and hemoglobin in oxygen transport.

Definitions:

Monosyllabic

Referring to words composed of a single syllable, often used to describe languages or speech patterns.

Polysyllabic

Describing words that contain more than one syllable, indicating a complexity in pronunciation or linguistic structure.

Bronze

An alloy of copper and tin, known for its hardness and durability, used historically for making tools, weapons, and sculptures.

Copper

A chemical element with the symbol Cu and atomic number 29, known for its high electrical and thermal conductivity, and widely used in electrical wiring and coinage.