Hie sir
The term pervasiveness as used to describe the effect of a matter in financial statements means what?Initially I thought in context it may refer to the magnitude of effect .Please correct me if I am wrong .
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Modified opinion
10y ago#1Pervasive literally means affecting everything or found everywhere.
Large misstatements or large gaps in evidence have more chance of being pervasive than small ones.
Thank you .So to my understanding if misstatements are pervasive they result in adverse opinions . For example in your explanation above , large misstatements could result from recognition of planes as non current assets in the financial statements of a company like Boeing or Airbus .This is because planes are literally inventory , thus no depreciation should be provided and they should appear in current assets.
The reason for the comment above is to test my understanding of matters which are pervasive but are confined to specific items which constitute a substantial proportion of financial statements as a whole .
10y ago#3Pervasive misstatements will produce adverse opinions. Pervasive insufficient evidence will result in a disclaimer of opinion.
Pervasive really means that the problem is so serious that the FS are not worth the paper they are printed on.
Thank you
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