Your aunt recently received the annual report for a company in which she has invested. The report notes that the statements have been prepared in accordance with “generally accepted accounting principles.” She has also heard that certain terms have special meanings in accounting relative to everyday use. She would like you to explain the meaning of terms she has come across related to accounting.

Explain how “materiality’ is defined by both FASB and IASB.

Identity at least two of these examples.

Do you think the materiality guidelines should be quantified? Why or why not?

Discuss the concept of “articulation” between financial statement elements.

Briefly summarize the meaning of this term and how it relates to an entity’s financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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