The Materiality of Accounting Errors: Evidence from SEC Comment Letters
通过分析SEC意见函，研究管理者如何判断会计差错的重要性，发现多数情况下即使差错超过5%的盈余基准，管理者仍认为不重要，且常以基准异常低为由，但SEC很少质疑。
ABSTRACT We gain unique insights into materiality judgments about accounting errors by examining SEC comment letter correspondence. We document that managers typically use multiple quantitative benchmarks in their materiality analyses, with earnings being the most common benchmark. In most of the cases we review, managers deem the error immaterial despite its exceeding the traditional “5 percent of earnings” rule of thumb, often in multiple periods and by a large degree. Instead of attempting to conceal these overages, managers tend to forthrightly acknowledge them, often asserting that the benchmark is abnormally low during the violation period. We find that 17–26 percent of these “low benchmark” assertions are suspect (although none of these “low benchmark” assertions are challenged by the SEC). We also document substantial variation in the extent to which qualitative factors are mentioned as considerations. The SEC generally is deferential toward managers' arguments and judgments but is more likely to challenge immateriality claims when managers admit there are qualitative factors that indicate errors are material.