Why is an entity permitted to change an accounting policy?

Q: Tia Kim believes that the analysis of financial statements is directed at two characteristics of an…

A: The question has two parts:- 1. One is related with the analysis of financial statements of an…

Q: Which of the following is not a purpose of financial statement analysis: Multiple Choice O O O O O…

A: Financial Statement Analysis is the analysis of  Balance sheets, Income Statements and Cash Flows so…

Q: The Framework issued by the IASB suggests that to show a true and fair view the information in…

A: International Accounting standard Boards (IASB) The purpose of  forming the International Accounting…

Q: A summary of the company’s significant accounting policies is a required disclosure. Why is this…

A: Disclosure of accounting policies: Disclosure of accounting policies means disclosing the accounting…

Q: Define the phrase “earnings management.” Under what conditions, if any, is earnings management…

A: Payments and receivables are managed in connection to purchases in earnings management. It is done…

Q: If a client fails to present to the external auditor a concrete plan or sufficient supporting…

A: The correct option is: Option B (S2 and S3 are true)

Q: Why is an entity permitted to change an accounting policy? a. The change would allow the entity to…

A: Accounting policy is the rule or method which is adapted by any entity according to the accounting…

Q: Which of the following questions best describes why an independent auditor is asked to give an…

A: It is the responsibility of management to maintain books of accounts, sound internal controls…

Q: The primary objective of financial accounting is to provide general purpose financial statements to…

A: FINANCIAL ACCOUNTING IS A METHOD OF DOCUMENTING , SUMMARISING AND REPORTING THE TRANSACTION ARISING…

Q: Changes in accounting policy are Permitted if the change will result in a more reliable and more…

A: Change in accounting policy refers to change in the method of accounting principles or rules…

Q: when analyzing audited financial statements for a publicly traded company, which step south you need…

A: Correct answer is d.determine the accounting principles used.

Q: Which of the following arguments is not in favour of entities being required to comply with…

A: Accounting Standards are standard set of rules or practices which must be followed at the time of…

Q: During an audit of an entity’s stockholders’ equity accounts, the auditor determines whether there…

A: Auditing:   In auditing, auditors verify the correctness and fair presentation of financial…

Q: State whether the following statement is true or false. "Accounting relies on inexact or approximate…

A: Financial Statements are the outcomes of accounting concepts and conventions combined with…

Q: Which one of the following statements is not correct regarding financial accounting and management…

A: Financial accounting is a branch of accounting which means preparation and circulation of financial…

Q: The objectives of financial reporting for business enterprises are based on the need for…

A: Financial reporting is the financial result of an organisation. Financial result include cash flow…

Q: Which of the following statements is CORRECT? O a. The CFO generally reports to the firm's chief…

A: CFO refers to the Chief Financial Officer and CEO refers to the Chief Executive Officer.

Q: What is the qualitative characteristic of financial statements according to the Framework?

A: Answer: The qualitative characteristics of financial statements are understandability to users, and…

Q: how accounting information helps shareholders and lenders to make decisions concerning the…

A:

Q: Auditor’s need to be diligent

A: The auditor undertakes the audit of financial statements to express an opinion whether they…

Q: Choose the answer which is not true about the conceptual framework for financial reporting. a. the…

A: The conceptual framework for financial reporting is a theory that that provides the basic reasonings…

Q: Which is an incorrect statement below? A. The name of the parent and the ultimate parent of the…

A: The related party is the party that is directly or indirectly related to the company for which the…

Q: Positive Accounting Theory seeks to: Select one: a. explain and predict which accounting methods…

A: Positive accounting is the department of scholarly bookkeeping inquiry that looks to clarify and…

Q: Which of the following statements are True? a) The financial statements are management's…

A: management is primarily responsible for the preparation and presentation of financial statements.…

Q: Which one of the following statements is not correct regarding financial ?accounting and management…

A: Financial accounting is a branch of accounting in which all accounting and financial information is…

Q: Which of the following statements is correct? A.The external auditor is responsible for the…

A: Introduction:- Accounting is the art of recording, measuring, classification, presentation and…

Q: What is the indirect effect of a change in accounting policy? Briefly describe the approach to…

A: Here is the answer :

Q: The performance of an attestation engagement on prospective financial information does not require…

A: Definition:

Q: Which principle or concept states that businesses should use the same accounting methods and…

A:

Q: Shareholders are external user of accounting information . The answer is true or false

A: The objective of the financial statement or accounting information is to provide information about…

Q: Which of the following statements regarding users of financial information is correct? Managers of…

A: Financial statement means the statement including income statement , balance sheet , cash flow…

Q: (Usefulness, Objective of Financial Reporting) Indicate whether the following statements about the…

A: Indicate whether the following statements about the conceptual framework are true or false. If…

Q: Which one of the following concepts is an important issue for the Auditors of financial accounts?…

A:

Q: According to the principle of Conservatism it is defined that when There are many ways to determine…

A: Principle of conservatism is a principle which lets the company to play safely means the income…

Q: In an attestation engagement, a CPA practitioner is engaged toa. Compile a company’s financial…

A: An attestation engagement is a course of action with a customer where an independent outsider or…

Q: Accounting information provides useful information about business transactions and events. Those who…

A: Note: Since we are entitled to answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit…

Q: Will the profits and expenses of a company impact disclosure and transparency?

A: Transparency refers to the access and disclosures of financial information. As financial information…

Q: What are the qualitative characteristics of financial statements according to the Framework?…

A: (1) The four principal qualitative characteristics are Understand ability Relevance Reliability…

Q: which of the following application would an auditor apply to determine the probability of a…

A: An auditor is a person who performs the check of accounts and the financial statements to prepare a…

Q: Which of the following statements relating to the role ofprofessional judgment in the financial…

A: The role of professional judgment is vital in many cases. While performing duties and fulfilling the…

Q: Which one of the following statements is not correct regarding financial accounting and management…

A: The correct option is  B. Only financial accounting involves the use of accounting information

Q: What is the objective of financial reporting?

A: Answer:   Option c.

Q: What is meant by generally accepted accounting principles,and how do these principles add to the…

A:

Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is