A member shall be considered to have knowingly misrepresented facts in violation of rule 102 he or she knowingly .

a. Makes, or permits or directs another to make, materially false and misleading entries in an entity’s financial statements or records; or
b. Fails to correct an entity’s financial statements or records that are materially false and misleading when he or she has the authority to record an entry; or
c. Signs, or permits or directs another to sign, a document containing materially false and misleading information.

b. Fails to correct an entity's financial statements or records that are materially false and misleading when he or she has the authority to record an entry

Explanation:

Section 102 deals with the issue of "integrity and objectivity". As per the rule, a member should act professionally and his/her judgement should be objective and not biased and should not misrepresent facts despite knowledge of them.

Under it, a member would be considered to have deliberately misinterpreted facts when he failed to correct financial statements and records of an entity, despite knowing that those are materially misstated and depict a false picture and are misleading, even though he had every authority to correct them.

Also, it would be considered knowingly misinterpretation when such a person induces someone else to make false and misleading entries in the entity's financial records.