Application of the full disclosure principle requires that the financial statements be consistent and comparable. is violated when important financial information is buried in the notes to the financial statements. is theoretically desirable but not practical because the costs of complete disclosure exceed the benefits. is demonstrated by the inclusion of information such as contingencies.

Application of the full disclosure principle requires that the financial statements be consistent and comparable. is violated when important financial information is buried in the notes to the financial statements. is theoretically desirable but not practical because the costs of complete disclosure exceed the benefits. is demonstrated by the inclusion of information such as contingencies.

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter16: Advanced Topics Concerning Complex Auditing Judgments

Section: Chapter Questions

Problem 33RSCQ

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Similar questions

Information is immaterial if omitting it or misstating it could influence decisions that users make on the basis of the financial information of a specific reporting entity. True False
Something is deemed to be 'material' if its omission, non-disclosure or misstatement is likely to affect economic decisions or other evaluations made by users entitled to rely on the financial statements. Select one alternative: True False
When an event impacts a financial statement element, it should be recognized in the accounting records even if reliability of the amount is questionable. True False
Information is considered material if: it would have a bearing on decisions of those who use the financial statements. there is a substantial likelihood that a reasonable investor would not be concerned about the information. an item is so insignificant that users would likely ignore it. the FASB explicitly rules the transaction or item to be material.
defination of non financial reporting with source? and define the element should included in non financial reporting
Which statement is incorrect? a. Notes to financial statements (F/S) provide narrative description or disaggregation of items disclosed in F/S and information about items that do not qualify for recognition. b. Notes to F/S are an integral part of F/S. c. Notes to F/S amplify the items presented in the F/S. d. Notes to F/S is the best demonstration of the standard of adequate disclosure. e. none of the above Which statement is incorrect? a. The FUNCTIONAL Income Statement classifies expenses into cost of sales, selling expenses and general administrative expenses, among others. b. Income encompasses both revenues and gains. Revenues arise in the ordinary course of business activities while gains are not. c. Expenses encompasses both expenses and losses. Losses usually comprise the majority amount of deductible expenses to arrive at taxable income. d. The statement of comprehensive income encompasses all income and expenses, whether they are recognized in profit or loss determination…
dentify the statement that is incorrect regarding relevance and faithful representation. Select one: a. Financial information without both relevance and faithful representation is useful. b. Financial information without both relevance and faithful representation cannot be made useful by being more comparable, verifiable, timely or understandable. c. Financial information without both relevance and faithful representation is not useful. d. Financial information that is relevant and faithfully represented may still be useful even if it does not have any of the enhancing qualitative characteristics
Application of the full disclosure principle _____________. a.requires that the financial statements be consistent and comparable b.is violated when important financial information is buried in the notes to the financial statements c.is theoretically desirable but not practical because the costs of complete disclosure exceed the benefits d.is demonstrated by the use of supplementary information explaining the effects of financing arrangement
Which of the following does not require disclosure in the financial statements? choices: There is a present obligation that probably requires an outflow of resources that can be measured reliably. There is a present obligation that probably requires an outflow of resources but the amount cannot be measured reliably. There is a possible obligation or a present obligation that may, but probably will not require an outflow of resources There is a possible obligation or a present obligation where the likelihood of an outflow of resource is remote.
true or false. No material misstatements are allowed if financial statements are to called fairly presented?
Materiality arises when a misstatement in the financial statements could affect a decision of areasonable user of the statements.Explain the levels of materiality used for determining the type of opinion.
How can a misstatement in one financial statement, whether intentional or not, affect a presentation in another financial statement?