Answered: consistency concept

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

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

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

Chapter14: Completing A Quality Audit

Section: Chapter Questions

Problem 19CYBK

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Question

Which of the following statements regarding the consistency concept is not true?

Select one:

A. The objective of the consistency concept is to facilitate comparison between one period and another

B. A selected accounting method must be used consistently every year

C. A company cannot change the selected accounting method once it is used

D. If inconsistency is found, the company must provide full explanation in the Statement of Profit or Loss and Other Comprehensive Income itself, or in the Statement of Financial Position, or in the notes to the accounts

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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