Questions to be asked – By how much? Which figures? Are they in the main statements or notes? Are they cross-referenced to a note that has the right figures? etc.<\/p>\n
No, there isn\u2019t a rule of thumb or a guideline with a percentage of some such about how and what is material. Whether a figure is misstated significantly is entirely up to the management to decide. Where does their limit of \u201cmaterial\u201d stand? As always, it\u2019s pretty much along the lines what the readers of the report would find significant and what would alter their decisions. If the misstatement is potentially at a scale that can mislead the investors, owners or suppliers in their actions and decisions, it\u2019s worthwhile to amend the accounts in the annual report or information therein.
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\nIn the case where the main statements are correct and it\u2019s just the notes that include misstated numbers, ask yourself if it\u2019s really that important to adjust the figures. What\u2019s the note about? If it\u2019s just more detailed information of the total balance on the balance sheet, like say inventory, it\u2019s doubtful it\u2019s important enough to take the annual report back and amend it. However, if the main statement itself includes wrong figures, it\u2019s a different story. Again, if it\u2019s clearly understandable that it\u2019s a typo (like for an example some numbers are just typed double and the balance sheet does not add up with the typo), it could be that it\u2019s not worth it to make the amendments as it\u2019s clearly visible which number is wrong and knowledgeable readers can understand it and see also the right figure behind it.<\/p>\n
There isn\u2019t a right or wrong answer or guidelines out there that could help you clearly classify a situation under one or the other option. What can be said, is just one thing – is it significant enough and how obvious is it for the readers to understand and find the correct information (if possible). If every part of the annual report includes misstated information as in it\u2019s not a typo in just one part of the report, it\u2019s more probable that the accounts need to be amended.<\/p>\n