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What Is Materiality? SEC & PCAOB v. FASB & ASB

Wednesday, May 23, 2012

 Samuel P. Gunther is an attorney and Certified Public Accountant practicing in New York. He has served on the AICPA's Auditing Standards Board, the Business Combinations Task Force of the FASB, FASB's Financial Accounting Standards Advisory Council, and the New York State Board for Public Accountancy.

Following a United States Supreme Court (“Supreme Court” or “Court”) decision in 1976 and the issuance by the Financial Accounting Standards Board (“FASB”) of Statement of Financial Accounting Concepts No. 2 in 1980, it appeared that the definition of financial statement materiality (“materiality”) under generally accepted accounting principles (“GAAP”) was clear.