Is fraud ever immaterial?


A search that brought someone to my blog over the weekend gave me the idea for this post. Immateriality is a concept in accounting that amounts to “too small to matter.” Think of a company with $100 million in sales each year. If they made a mistake in recording their sales last year, and the number was really $99,950,000 (an error of $50k), would it matter?

Probably not. Whether sales are $50k higher or lower for a company with sales of $100 million really…. it’s just not a big enough difference to matter. Continue reading