Two alternative approaches are used in audit practice to make quantitative materiality assessments about proposed audit adjustments: the cumulative approach compares to net income the total amount of misstatement existing at the end of the current period, while the current-period approach...

Firms can effectively take long or short positions on their own equity by holding treasury shares, contributing their shares to their pension fund, write put or call options on their stock, compensate employees with stock options, or invest in other entities (e.g., other firms, stock indexes)...