Don't use ai Whatmakes the principle of articulationfundamental in financial statements?a) It prevents cross-referencing between statementsb) It keeps each statement completely independentc) It only applies to the income statementd) It ensures changes in one statement reflect inrelated statements

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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

Chapter17: Other Services Provided By Audit Firms

Section: Chapter Questions

Problem 57RSCQ

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What is not a financial statement assertion are:a. Accuracyb. Completenessc. Presentation and disclosured. Occurrence
Horizontal analysis is used to understand the relative importance of each financial statement item. True or False True False
23. What is the process of incorporating an item in the statement of financial position or statement of profit or loss and other comprehensive income, when it meets the definition criteria? a. None of the options b. De-recognition c. Recognition d. Measurement
Items of dissimilar nature or function: B must be presented separately in financial statements if these items are material. must not be presented separately. must be presented separately in financial statements even if these items are immaterial. must always be presented separately.
Which of the following is not a criterion to recognize revenue under GAAP? A. The earnings process must be completed. B. A product or service must be provided. C. Cash must be collected. D. GAAP requires that the accrual basis accounting principle be used in the revenue recognition process.
In general, how does the income statement help satisfy the objectives of financial reporting?
Which of the following is an assumption made in the preparation of the financial statements? Select one: a. The current market value is assumed to be less relevant than the original cost paid. b. Financial statements are prepared for a specific entity that is distinct from the entity's owners. c. The preparation of financial statements for a specific time period assumes that the balance sheet covers a designated period of time. d. Financial statements are prepared assuming that inflation
Under the Conceptual Framework for Financial Reporting which of the following statements is not a feature of financial information’s “comparability” characteristics? Comparability is uniformity A comparison requires at least two items Consistency, although related to comparability, is not the same Comparability is the goal; consistency helps to achieve that goal
Which of the following statements is not correct regarding combined statement of financial position errors and income statement errors? a. It does not affect net income. b. It results to misstatement of the statement of financial position. c. It can be classified as counterbalancing errors and non-counterbalancing errors. d. It affects both real and nominal accounts.
Comment on the statement that materiality is in the eye of the beholder. How does this statement relate to the discussion in this chapter of how to gauge materiality in assessing financial statement restatements? Is materiality inconsistent with the notion of representational faithfulness?
Which of the following statements about the process of developing a reformulated Balance Sheet is NOT correct? O 1. Derivative financial liabilities should be classified as financial obligations O 2. Lease interest should be classified as a financial expense O 3. Preference shares should be classified as a financial obligation O 4. Every asset can be clearly classified as an operating asset or financial asset. There is no judgement or uncertainty involved
How does the concept of consistency aid in the analysis of financial statements? Why type of accounting disclosure is required if this concept is not applied? Answer:

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What makes the principle of articulation fundamental in financial statements? a) It prevents cross-referencing between statements b) It keeps each statement completely independent c) It only applies to the income statement d) It ensures changes in one statement reflect in related statements