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If the chairman report states the increase in sales or any other elements of f/s contradict with the audited f/s.wd it be material inconsistency or misstatement of fact.i m confused abt their difference.
This is a very old post, but still I answer for the benefit of new students
Its a material inconsistency, and not a misstatement of fact as many would call it.
A Misstatement of fact is stating something erroneous other than the information in Financial Statements FS. It could be wrong date of incorporation, or saying we are green while not doing anything green.Its an inconsistency because the auditors are saying something else while the chair reports something else. Here its the reporting of incremental sales while the auditors have confirmed its not
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