Significant Accounts

[sig-NIF-i-kant uh-KOUNTS]

What is the definition of Significant Accounts?

Accounts considered significant if there exists more than a remote likelihood that they could contain misstatements, which individually or in aggregation, could materially affect the financial statements. This assessment considers the risks of both overstatement and understatement.

Using Significant Accounts in an Example

In the preparation of financial statements, significant accounts such as revenue, accounts receivable, and inventory are given additional attention during audits due to their potential impact on the overall financial health of the company.

Using Significant Accounts in a sentence

During the audit, we focused on significant accounts that could materially influence our financial reporting and compliance.

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