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The Materiality Concept: Implications for Managers and Investors

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  • Ahmad Hussein Juma’h

Abstract

Discuss the implications of materiality of financial information on "earnings management". Imply the content description and analysis of FASB Accounting Standards Codification¿. The Professional View is used to confirm the absence of materiality guidelines in the US GAAP. Materiality, importance and significance are terms used to indicate the materiality consideration in the Codifications. The main conclusions are concerned to, first, the internal and external determinants and motives influence the practices of "earnings managements", and second US GAAP do not offer well defined guidelines to apply materiality on decision making.******Se discuten las implicaciones de la materialidad de la información financiera sobre ¿manejo de los ingresos¿. Implica la descripción y el análisis del contenido de la Codificación de Normas Contables¿. Las perspectivas profesionales fueron utilizadas para confirmar la ausencia de directrices de importancia relativa en los Principios de Contabilidad Generalmente Aceptados (en inglés, PCGA) de los EE. UU. Los términos ¿materialidad¿, ¿significancia¿ e ¿importancia¿ fueron usados para determinar la inclusión de materialidad en las codificaciones. Las principales conclusiones indican que, primero, los factores determinantes y las motivaciones internas y externas influyen en las prácticas de ¿manejos de ganancias¿ y, segundo, los PCGA de EE. UU. no cuentan con directrices bien definidas para aplicar la materialidad en la toma de decisiones.

Suggested Citation

  • Ahmad Hussein Juma’h, 2014. "The Materiality Concept: Implications for Managers and Investors," Revista Finanzas y Politica Economica, Universidad Católica de Colombia, vol. 6(1), pages 159-168, April.
    • Handle: RePEc:col:000443:012138
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    References listed on IDEAS

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    More about this item

    Keywords

    manipulación de cuentas; manejo de ingresos; materialidad; estados financieros.*********Keywords: Accounts Manipulation; Earnings Management; Materiality; and Financial Statements.;
    All these keywords.

    JEL classification:

    • M00 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General - - - General

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