Solutions for Chapter 1 Auditing: Integral to the Economy Review Questions: 1-1. The special function performed by the public accounting profession is the attestation to the fairness of the financial statements of clients. The special function ensures the reliability and integrity of the financial reporting system. Judge Burger described the special function as "certifying the public reports that collectively depict a corporation’s financial status‚" which involves "a public responsibility transcending
Premium Auditing Audit Internal audit
transactions between businesses or personal and business activities are kept separate (Weygandt‚ Kimmel‚ & Kieso‚ 2008). The U.S. has a recognized set of standards in accounting called generally accepted accounting principles (GAAP). The standards set forth from the GAAP include specific rules indicating how economic events should be reported in the accounting process (Weygandt‚ Kimmel‚ & Kieso‚ 2008). The principles of accounting ensure that every organization is held to the same standard on
Premium Business Economics
and US GAAP The IASB and the US Financial Accounting Standards Board (FASB) have been working together since 2002 to achieve convergence of IFRSs and US generally accepted accounting principles (GAAP). A common set of high quality global standards remains a priority of both the IASB and the FASB. In September 2002 the IASB and the FASB agreed to work together‚ in consultation with other national and regional bodies‚ to remove the differences between international standards and US GAAP. This
Premium Financial Accounting Standards Board Gentlemen's agreement
31‚ 2010. Of the three options the best alternative seems to be offering a discount if the customer takes the product by December 31‚ 2010. Giving discounts to a buyer is not an uncommon practice and is not an illegal practice that is defined by the GAAP or the SEC. If the product is delivered to the buyer by the December 31‚ 2010 deadline the sale will be legitimate and the $1.2 million dollars can be appropriately recorded in 2010. Transferring the product to the buyer before January in order to
Premium Management Generally Accepted Accounting Principles Corporate governance
Chapter 1 BE1-1 Briefly define accounting. What are the three main characteristics of accounting? Is accounting static or dynamic? Accounting collects‚ analyzes‚ measures and records financial information about an organization and reports that information to stakeholders and decision makers. Accounting has 3 essential characteristics. Accounting is the (1) identification‚ measurement‚ and communication of financial information about economic entities to interested persons. Like social
Premium International Financial Reporting Standards Financial statements Financial Accounting Standards Board
opinion‚ was this a proper accounting practice? Explain. Though this may not be out of the ordinary for WorldCom‚ this is not a correct accounting practice. The way the entries were made does not comply with the proper account practice according to GAAP. Detailed support is an important part of providing support to a journal entry and it explains the reason or purpose as to why the journal entry was created. 2. Based on GAPP‚ describe the propriety or impropriety of releasing of $150 million in
Premium Auditing Financial audit Audit
the Securities and Exchange Commission. The information contained in the forward looking statements is provided as of the date of such oral statements and the company disclaims any obligation to update such statements. This document includes the non-GAAP financial measure of “Adjusted EBITDA” which we define as net income/loss excluding: provision for income taxes; interest and other income
Premium Income statement Revenue Income
their accounting choices so that they can make the best possible choice for the organisation. In other words‚ they must learn to manage earnings. There are two schools of thought on earnings management‚ Acceptable Earnings Management and Unacceptable Earnings Management. According to Acceptable Earnings Management view‚ earnings management concerns reasonable and legally accepted management decisions and financial reporting with the aim of achieving predictable financial results. Earnings management
Premium Governance Management
Revenue recognition on FASB and IASB convergence process I. CONVERGENCE OF U.S. GAAP AND IFRS Since 2002‚ Financial Accounting Standards Board (FASB) and International Accounting Standards Board’s (IASB) have been working toward “convergence” of US General Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). They have made significant progress in efforts to converge critical accounting standards such as those dealing with revenue recognition‚
Premium Generally Accepted Accounting Principles Balance sheet Income statement
for secondary format. The US GAAP use the management approach whereby segments are determine based on how information is presented to the decision maker for allocation of resources. The product revenue‚ assets‚ and location are required‚ regardless by the decision of management. IFRS 8 converges international accounting with US GAAP by utilizing the management approach to determine reportable segments. The two major differences will remain under IFRS 8. Firstly‚ US GAAP requires companies with a matrix
Premium Generally Accepted Accounting Principles Revenue Decision making