A misstatement in the financial statements can be considered material if knowledge of the misstatement will affect a decision of
A) the PCAOB.
B) a reasonable user of the financial statements.
C) an accountant.
D) the SEC.

Question

Quizplus · Accepted Answer

A misstatement in the financial statements can be considered material if it would affect a reasonable user's decision. The decision could be related to investing, lending, or other economic decisions. The other options such as PCAOB, accountant, and SEC may have a role in detecting or reporting the misstatement, but the materiality assessment is based on how it affects the users of the financial statements.

A Misstatement in the Financial Statements Can Be Considered Material