I am waiting for Your answer tutor When establishing accounting policies for a new business venture, what role should professional judgmentplay in selecting between alternative acceptable methods? Is there a clear line between professionaljudgment and accounting manipulation?

Approach to solving the question: Research and Analysis Key references:accaglobal.com. (2012). A…

Answered: When establishing accounting policies…

Contemporary Auditing

11th Edition

ISBN:9781337650380

Author:KNAPP

Publisher:KNAPP

Chapter8: International Cases

Section8.5: Shari’a

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Question for Accounting Policies
Case study: Question, sub: accounting
How could the presentation of financial information pose an ethical dilemma to a business professional who is attempting to meet the demands of users who are interested in similar information?
What is the concept of conservatism in accounting and why is it important? Discuss the potential drawbacks of applying conservatism too strictly.
It has been suggested that not all accounting choices are made by management in the best interest of fair and consistent financial reporting. Required: What motivations can you think of for management’s choice of accounting methods?
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.
Drawing on your background in accounting, can you think of any accounting procedure differences that might make it difficult to compare the relative performance of different firms?
why is it important to improve the quality of accounting standards?
Evaluate the following statements from an ethical perspective:“Earnings management in a narrow sense is the behavior of management to play with the discretionary accrual component to determine high or low earnings.”“Earnings are potentially managed, because financial accounting standards still provide alternative methods.”
Accounting Theoretical Question. In developing accounting policies, what weight should be given to industry-specific practices versus general accounting principles? Examine the tension between standardization and specialized reporting needs. Where should accountants draw the line between conformity and customization? How might this balance affect the comparability of financial information across industries?
How are financial accountants pressured when they need to make ethical decisions in their work? Is having technical mastery of GAAP enough to practise financial accounting?

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When establishing accounting policies for a new business venture, what role should professional judgment play in selecting between alternative acceptable methods? Is there a clear line between professional judgment and accounting manipulation?