Q.1.1 - Q.1.2 Financial statements should always reflect a true and fair view of a business's affairs. It is the duty of accountants to ensure that the financial statements provide a faithful representation of the financial position of the organisation. To achieve this, certain qualitative characteristics are to be applied. In your own words describe what you understand by both fundamental qualitative characteristics and enhancing qualitative characteristics. Hint: Name each of the characteristics under each of the headings - Fundamental qualitative characteristics and Enhancing qualitative characteristics and provide a short description of each characteristic. Provide one actual example from the business world that supports the necessity for the use of good quality accounting information or the lack thereof (Hint: The Enron scandal of 2003 in the USA where the financial information had been falsified to mislead investors). (1) Q.1.3 Why has South Africa changed from the Accounting Standards known as GAAP (Generally Accepted Accounting Standards) to the IFRS (International Financial Reporting Standards), beyond the obvious reason that business is frequently done across national boundaries in the modern era? (2) Good to go Search i (14)

Qualitative Characteristics The following is a list of qualitativecharacteristics of useful accounting information identified in the FASB'sand the IASB's Statement of Financial Accounting Concepts No. 8 andstatements describing the qualities. A. ComparabilityB. Decision usefulnessC. RelevanceD. Faithful representation E. Predictive valueF. Confirmatory valueG. VerifiabilityH. NeutralityI. Free from error J. ConsistencyK. MaterialityL. TimelinessM. UnderstandabilityN. Completeness _ _ _ _ _ _1. Different knowledgeable and independent observers conreach consensus that a particular representation is faithful_ _ _ _ _ _2. Making information available to decision makers before itloses its capacity to influence decisions._ _ _ _ _ _3. Capacity to make a difference in a decision, enabling users to predict future outcomes and/or confirm prior expectations._ _ _ _ _ _4. Overall objective of financial information. _ _ _ _ _ _ 5. Absence of bias intended to influence financial statementusers'…

Qualitative Characteristics The following is a list of qualitative characteristics of useful accounting information identified in the FASB's and the IASB's Statement of Financial Accounting Concepts No. 8 and statements describing the qualities. A. Comparability B. Decision usefulness C. Relevance D. Faithful representation E. Predictive value F. Confirmatory value G. Verifiability H. Neutrality I. Free from error J. Consistency K. Materiality L. Timeliness M. Understandability N. Completeness Required: Select the appropriate letter identifying each quality on the statement describing the quality. 1. Different knowledgeable and independent observers can reach consensus that a particular representation is faithful.     2. Making information available to decision makers before it loses its capacity to influence decisions.     3. Capacity to make a difference in a decision, enabling users to predict future outcomes and/or confirm prior expectations.     4. Overall objective of…

1. Indicate whether each of the following statements describes financial accounting or managerial accounting. The information is directed at external users who are making decisions pertaining to investing, extending credit, and other decisions?  The principal users are the organization’s managers? The key focus is on the entity as a whole? The rules and principles are very flexible? The information gathered is usually available after an independent audit has been completed?

(Usefulness, Objective of Financial Reporting) Indicate whether the following statements about the conceptual framework are true or false. If false, provide a brief explanation supporting your position.(a) Accounting rule-making that relies on a body of concepts will result in useful and consistent pronouncements.(b) General-purpose financial reports are most useful to company insiders in making strategic business decisions.(c) Accounting standards based on individual conceptual frameworks generally will result in consistent and comparable accounting reports.(d) Capital providers are the only users who benefit from general-purpose financial reporting.(e) Accounting reports should be developed so that users without knowledge of economics and business can become informed about the financial results of a company.(f) The objective of financial reporting is the foundation from which the other aspects of the framework logically result.

The accounting system should provide information for: Select one: O A. Reporting actual performance to managers O B. Strategic decisions O C. Preparation of financial statements O D. All of the above.

Indicate whether each statement describes financial accounting or managerial accounting.A. The information is directed at external users who are making decisions pertaining to investing,extending credit, and other decisions.B. The principal users are the organization’s managers.C. The key focus is on the entity as a whole.D. The rules and principles are very flexible.E. The information gathered is usually available after an independent audit has been completed.

Positive Accounting Theory seeks to: Select one: a. explain and predict which accounting methods management is likely to select from available choices.C. describe how social relationships are implicated in lobbying by interest groups in accounting standard-setting. b. describe how social relationships are implicated in lobbying by interest groups in accounting standard-setting. c. prescribe which accounting methods should be used in particular circumstances d. formulate an understanding of how accountability to a broader set of stakeholders should be achieved.

Multiple choice: 1. This qualitative characteristic requires at least two items. A. Timeliness B. Comparability C. Verifiability D. Understandability 2. It is the process of objectively evaluating evidence and expressing an opinion regarding the correspondence between management’s assertions and established criteria. A. Accounting education B. Tax accounting C. Auditing D. Accounting research

. Indicate whether each statement describes financial accounting or managerial accounting. The information is directed at external users who are making decisions pertaining to investing, extending credit, and other decisions. The principal users are the organization’s managers. The key focus is on the entity as a whole. The rules and principles are very flexible. The information gathered is usually available after an independent audit has been completed. 2.  Identify the following as True or False: Managerial accounting reports must comply with the rules set in place by the FASB. Financial accounting reports are typically general-purpose reports. Financial accounting reports pertain to the entity as a whole, whereas managerial accounting focuses more on subunits of the organization. The main users of the financial accounting information are the internal users. Managerial reports are prepared on an as-needed basis. Financial accounting reports often must be audited at least annually…