INTERM.ACCT.:REPORTING...-CENGAGENOWV2
3rd Edition
ISBN: 9781337909358
Author: WAHLEN
Publisher: CENGAGE L
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Chapter 1, Problem 2C
To determine
Describe the reasons for the political involvement during the accounting standards setting process.
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In establishing financial accounting standards, two basic premises of the FASB are (1) The FASB should be responsive to the needs and viewpoints of the entire economic community, not just the accounting profession. (2) It should operate in full view of the public through a "due process" system that gives interested persons ample opportunity to make their views known. To ensure achievement of these goals, what steps does the FASB follow in the development of a typical FASB standard?
In addition to the preparation of
financial statements, it is also the
responsibility of those charged with
governance to: *
Identify the financial reporting
framework to be used in the
preparation and presentation of their
financial report.
Establish and maintain internal
controls that are effective in
preventing and detecting material
misstatements
Selecting and applying appropriate
O accounting policies and making
reasonable accounting estimates
All of the above.
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Chapter 1 Solutions
INTERM.ACCT.:REPORTING...-CENGAGENOWV2
Ch. 1 - Prob. 1GICh. 1 - Prob. 2GICh. 1 - Prob. 3GICh. 1 - Prob. 4GICh. 1 - Prob. 5GICh. 1 - Prob. 6GICh. 1 - Prob. 7GICh. 1 - What are the two primary forces determining the...Ch. 1 - Prob. 9GICh. 1 - Prob. 10GI
Ch. 1 - Prob. 11GICh. 1 - Prob. 12GICh. 1 - Prob. 13GICh. 1 - Prob. 14GICh. 1 - Prob. 15GICh. 1 - Prob. 16GICh. 1 - Prob. 17GICh. 1 - Prob. 18GICh. 1 - Prob. 19GICh. 1 - Prob. 20GICh. 1 - Prob. 21GICh. 1 - Prob. 22GICh. 1 - Prob. 23GICh. 1 - Why do accountants have to be ethical in their...Ch. 1 - Prob. 25GICh. 1 - Prob. 1ECh. 1 - Prob. 1CCh. 1 - Prob. 2CCh. 1 - Prob. 3CCh. 1 - Prob. 4CCh. 1 - One of your friends remarks, I understand that...Ch. 1 - Prob. 6CCh. 1 - Prob. 7CCh. 1 - Prob. 8CCh. 1 - Prob. 9CCh. 1 - Prob. 12CCh. 1 - Prob. 13CCh. 1 - Codification Situation You are conducting an...
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- What is involved in the legal requirements of financial governance? Select an answer: having a process in place for internal and external auditing of financial records collecting, managing, monitoring, and controlling financial information holding accountants legally responsible for the accuracy of financial reportsarrow_forwardThe conceptual framework indicates the desired fundamental and enhancing qualitative characteristics of accounting information. Several constraints impede achieving these desired characteristics. Answer each of the following questions related to these characteristics and constraints. 1. 2. Donald Kirk, former chairman of the FASB, once noted that "... there must be public confidence that the standard-setting system is credible, that selection of board members is based on merit and not the influence of special interests..." Which characteristic is implicit in Mr. Kirk's statement? 3. 4. Which component would allow a large company to record the purchase of a $120 printer as an expense rather than capitalizing the printer as an asset? 7. Allied Appliances, Inc., changed its revenue recognition policies. Which characteristic is jeopardized by this change? National Bancorp, a publicly traded company, files quarterly and annual financial statements with the SEC. Which characteristic is…arrow_forwardAccounting conventions play a pivotal role in the world of financial reporting, providing a set of guidelines and standards that ensure consistency, comparability, and reliability in financial statements. These conventions, also known as accounting principles or norms, are essential for accountants, financial analysts, and organizations to accurately convey financial information to stakeholders. Two widely recognized and utilized accounting conventions are the "Conservatism Convention" and the "Consistency Convention." The Conservatism Convention dictates that when faced with uncertainties or alternative accounting methods, accountants should lean towards methods that are less likely to overstate assets or income. This principle ensures a prudent approach to financial reporting, reflecting a more cautious and realistic picture of a company's financial health. On the other hand, the Consistency Convention emphasizes the importance of uniformity in accounting methods over time. This…arrow_forward
- 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.arrow_forwardWhich of the following parties is responsible for the fairness of the representations made in financial statements? * O Audit committee. Client's management. AICPA. OIndependent auditor. TOSHIBAarrow_forwardThe Financial Accounting Standards Board (FASB) has developed a conceptual framework for financial accounting and reporting. The FASB has issued eight Statements of Financial Accounting Concepts. These statements are intended to set forth the objective and fundamentals that will be the basis for developing financial accounting and reporting standards. The objective identifies the goals and purposes of financial reporting. The fundamentals are the underlying concepts of financial accounting that guide the selection of transactions, events, and circumstances to be accounted for; their recognition and measurement; and the means of summarizing and communicating them to interested parties. The purpose of the statement on qualitative characteristics is to examine the characteristics that make accounting information useful. These characteristics or qualities of information are the ingredients that make information useful and the qualities to be sought when accounting choices are made.…arrow_forward
- a) The IASB's Conceptual Framework for Financial Reporting lays out the objectives and fundamentals that will guide the development of financial accounting and reporting standards. The purpose of financial reporting is defined by its objectives. The characteristics or qualities of information discussed in the Conceptual Framework are the concepts that make information useful and the qualities to be sought when accounting choices are made. Required i. Explain the benefits that the firms derived from the Conceptual Framework in preparing their financial statements. ii. Explain the most essential quality for accounting information as stated in the Conceptual Framework? Justify your answer with an example.arrow_forwarda) The IASB's Conceptual Framework for Financial Reporting lays out the objectives and fundamentals that will guide the development of financial accounting and reporting standards. The purpose of financial reporting is defined by its objectives. The characteristics or qualities of information discussed in the Conceptual Framework are the concepts that make information useful and the qualities to be sought when accounting choices are made. Required i. Explain the benefits that the firms derived from the Conceptual Framework in preparing their financial statements. ii. Explain the most essential quality for accounting information as stated in the Conceptuai Framework? Justify your answer with an example.arrow_forwardThe private sector organization involved in developing accounting principles is the Financial Auditors' Standards Body. Feasible Accounting Standards Body. Financial Accounting Standards Board. O Financial Accounting Studies Board.arrow_forward
- Which of the following statement best explains the need for a regulatory framework? A regulatory framework is required Select one: а. To encourage a variety of accounting presentation of transactions to emerge b. To enable accounting standards to develop in a more coherent fashion С. To ease the task of developing and implementing standards d. To enhance relevance and reliability of financial information in order to meet the information needs of the usersarrow_forwardWhich of the following statements about desirable attributes of accounting standards boards is most accurate? Accounting standards boards should: A . concede to political pressuresarrow_forwardThe objectivity standards of management accountants state that they must communicate information fairly and objectively. This means essentially that accountants must perform each task A as professionals, possessing the degree of skill of those management accountants who held the position before them. B so as to provide relevant information, both positive and negative, to the recipients of their reports. C to the satisfaction of government regulators. D in conformity with generally accepted accounting principles. ↓yarrow_forward
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