Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Chapter 3, Problem 11RQ
To determine
Explain the manner in which the changes of inventory method would affect the financial statements.
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Using IFRS, how should prior period errors that are discovered in a subsequent reporting period be recognized in the financial statements? a. As an adjustment to beginning retained earnings for the reporting period in which the error was discovered. b. As a note in the financial statements that the error was previously made but has since been corrected. c. In the current period if it’s not considered practicable to report it retrospectively. d. In the statement of comprehensive income.
Generally accepted methods of accounting for a change in accounting principle include
restating prior years' financial statements presented for comparative purposes.
making a prior period adjustment.
prospective changes.
including the cumulative effect of the change in current period net income.
IFRS requires companies to use which method for reporting changes in accounting policies?
a. Cumulative effect approach.
b. Retrospective approach.
c. Prospective approach.
d. Averaging approach.
Chapter 3 Solutions
Auditing And Assurance Services
Ch. 3 - Prob. 1RQCh. 3 - Prob. 2RQCh. 3 - Prob. 3RQCh. 3 - Prob. 4RQCh. 3 - Prob. 5RQCh. 3 - Prob. 6RQCh. 3 - Prob. 7RQCh. 3 - Prob. 8RQCh. 3 - Prob. 9RQCh. 3 - Prob. 10RQ
Ch. 3 - Prob. 11RQCh. 3 - Prob. 12RQCh. 3 - Prob. 13RQCh. 3 - Prob. 14RQCh. 3 - Distinguish between a report qualified due to a...Ch. 3 - Prob. 16RQCh. 3 - Prob. 17RQCh. 3 - Prob. 18RQCh. 3 - Prob. 19RQCh. 3 - Prob. 20.1MCQCh. 3 - Prob. 20.2MCQCh. 3 - Prob. 20.3MCQCh. 3 - Prob. 21.1MCQCh. 3 - Prob. 21.2MCQCh. 3 - Prob. 21.3MCQCh. 3 - Prob. 22.1MCQCh. 3 - Prob. 22.2MCQCh. 3 - Prob. 22.3MCQCh. 3 - Prob. 23DQPCh. 3 - Prob. 24DQPCh. 3 - Prob. 25DQPCh. 3 - Prob. 26DQPCh. 3 - Prob. 28DQPCh. 3 - Prob. 29DQP
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- why would an auditor ensure that all revenue-related disclosures are made in the financial statementsarrow_forwardWhat does the end product of an audit report of a company express on the client's financial statement?arrow_forwardWhat are the implications of a revised accounting estimate?arrow_forward
- Generally accepted methods of accounting for a change in accounting principle include O ncluding the cumulative effect of the change in current period net income. restating prior years' financial statements presented for comparative purposes. O making a prior period adjustment. O prospective changes.arrow_forwardIf the statement of financial position error is discovered in a subsequent accounting period, what action is to be done by the entity? A. Reclassify the item to its proper real account but do not restate the statement of financial position of the prior year affected by the error. B. Reclassify the item to its proper real account. C. Restate the statement of financial position of the prior year affected by the error. D. Reclassify the item to its proper real account and restate the statement of financial position of the prior year affected by the errorarrow_forwardThe main portion of an independent auditor’s work in expressing an opinion on financial statements consists of a. Obtaining and examining sufficient appropriate evidence b. Examining compliance with tax laws c. Studying and evaluating internal control d. Comparing client’s total accountabilities with its actual assets as of the end of the reporting periodarrow_forward
- What is the authoritative guidance for AU-C 540 Auditing Accounting Estimates, including Faire Value Accounting Estimates, and Related Disclosures?arrow_forwardWhich of the following would be considered a change that affects consistency? * Change in accounting estimate. O Change in reporting entity. Change in classification and reclassification.arrow_forwardFor a subsequent event condition existing on or before the balance sheet date, the auditor should Group of answer choices Consider a note disclosure Report to audit committee Alert shareholders directly Adjust financial statement amountsarrow_forward
- Describe the nature of the evidence the internal revenue agentwill use in the audit of Jones Company’s tax return.arrow_forwardWhich of the following should an auditor obtain from the predecessor auditor prior to accepting an audit engagement? O All matters of continuing accounting significance O Facts that might bear on the integrity of management O Analysis of balance sheet accounts O Analysis of income statement accountsarrow_forwardThe primary reason for preparing a reconciliation between interest-bearing obligations outstanding during the year and interest expense in the financial statements is toa. Evaluate internal control over securities.b. Determine the validity of prepaid interest expense.c. Ascertain the reasonableness of imputed interest.d. Detect unrecorded liabilities.arrow_forward
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