The North Face case deals with materiality and how auditors employ that metric in an audit. The following are all true except:
A) North Face accounted for barter transactions with full normal margin recognized.
B) Crawford devised the 1997 barter transaction so that it was just beneath material threshold.
C) Crawford followed the GAAP methods that Deloitte suggested.
D) Deloitte proposed an adjusting entry for the 1997 barter transaction, but "passed" it as immaterial.

Question

Quizplus · Accepted Answer

Crawford did not follow the GAAP methods suggested by Deloitte, which is why the barter transactions were problematic.

The North Face Case Deals with Materiality and How Auditors