[joyflying]

Hi,

I am in A5, and came across a question on Becker (CPA – 02585). It says that in the sample, there is an overstatement of $3700 and an understatement of $200. Therefore the net overstatement is $3500. I am just wondering, shouldn’t the misstatement be evaluated in terms of its absolute value. For example, if you have an overstatement of $1,000,000 and another understatement of $1,000,000, according to the explanation of Becker, so we will have no misstatement at all?? This is confusing. Can someone help me out?

Thanks a lot!

FAR - 93 (08/24/2014 - First down!)
AUD - 91 (11/21/2014 - Second down!!)
BEC - 90 (02/26/2015 - Third down!!!)
REG - 94 (05/29/2015 - Touch down!!!!!)

Here comes my touch down!
Certified in MA (08/2015)

[Anonymous]

Without getting into too much detail in regards to disclosure rules, I choose not to focus on that area much at all. Your understanding is about the level I had going into the exam. Best of luck!

[joyflying]

@cmyers5 The reason why I put attention to it is because I think in some circumstances, it might influence your opinion regarding the misstatement. Small chance bumped into such questions during the exam, still wanna figure it out.

FAR - 93 (08/24/2014 - First down!)
AUD - 91 (11/21/2014 - Second down!!)
BEC - 90 (02/26/2015 - Third down!!!)
REG - 94 (05/29/2015 - Touch down!!!!!)

Here comes my touch down!
Certified in MA (08/2015)

[Author]

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