Question #12
Reading: Reading 18 Corporate Restructuring
PDF File: Reading 18 Corporate Restructuring.pdf
Page: 6
Status: Unattempted
Question
Which of the following statements about materiality is least accurate?
Answer Choices:
A. Cost restructuring may be evaluated as estimated savings as a percentage of sales
B. Materiality is evaluated based on transaction size and fit
C. The divestment of an unrelated business for a company that had previously been diversifying into such businesses is immaterial
Explanation
The divestment of an unrelated business for a company that had previously been
diversifying into such businesses is material because it may be an indication of a change in
strategy, or that the strategy is not working.