Year-end toolkit: Making materiality assessments

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In each episode of our Year-end toolkit series, you’ll find something relevant to the year-end reporting process.

This week Heather Horn was joined by Michael Mullen, PwC’s US Trust Solutions Quality Management leader, to discuss the SEC’s guidance on financial statement materiality and error evaluations.

In this episode you’ll hear them discuss:

• 1:25 - What’s changed since the SEC staff issued its accounting bulletin (SAB 99) in 1999, and what’s the same
• 8:45 - Some “common sense” qualitative factors that should be considered
• 10:35 - Evaluating the impact of errors on consensus estimates, analyst expectations, and balance sheet-related covenants
• 18:01 - The dynamics of management compensation and involvement of upper management in intentional misstatements
• 21:01 - How to perform a quantitative evaluation, and the differences between a restatement and a revision
• 38:17 - The general presumption of a material weakness in cases of restatement
• 41:02 - Managing the misstatement evaluation process and the recent reminders from the SEC staff

Want to learn more? 

• Listen to our previous podcasts in the Year-end toolkit series, Reminders from PwC’s National Office, Statement of cash flows, and Resolving complex issues.

Michael Mullen is PwC’s US Trust Solutions Quality Management leader. In this role he oversees complex client issues, providing technical insights and expertise in support of overall quality. With over 30 years of client service experience, Michael has led numerous global client engagements.

Heather Horn is PwC’s National Office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 30 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

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