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- How can a misstatement in one financial statement, whether intentional or not, affect a presentation in another financial statement?When an event impacts a financial statement element, it should be recognized in the accounting records even if reliability of the amount is questionable. True FalseSomething is deemed to be 'material' if its omission, non-disclosure or misstatement is likely to affect economic decisions or other evaluations made by users entitled to rely on the financial statements. Select one alternative: True False
- Accounting standards require that the statement of financial position be prepared on a classified basis. True FalseInformation is immaterial if omitting it or misstating it could influence decisions that users make on the basis of the financial information of a specific reporting entity. True FalseMisstatements in the financial statements can result from errors or fraud and may consist of any of the following: An inaccuracy in gathering or processing data from which financial statements are prepared. A difference between the amount, classification, or presentation of a reported financial statement element, account, or item and the way that it should have been reflected under GAAP. The omission of a financial statement element, account, or item. A financial statement disclosure that is not presented in conformity with GAAP. The omission of information required to be disclosed in conformity with GAAP. An incorrect accounting estimate due to oversight, misrepresentation of facts, or fraud. Management’s judgments concerning an accounting estimate or the selection or application of accounting policies that the auditor may consider unreasonable or inappropriate. What steps would you take if you discover 1 of the above issues in a routine audit? Would you take…
- Which statement is incorrect? a. Notes to financial statements provide narrative description or disaggregation of items disclosed in F/S and information about items that do not qualify for recognition. b. Notes to financial statements are an integral part of financial statements. c. Notes to financial statements amplify the items presented in the financial statements. d. Notes to financial statements is the best demonstration of the standard of adequate disclosure. e. none of the abovePrior period errors: a. Do not include mistake in the application of policy b. Do not affect presentation of financial statements c. Do not require further disclosure d. Are omissions and misstatements in the financial statements of prior periodsApplication of the full disclosure principle requires that the financial statements be consistent and comparable. is violated when important financial information is buried in the notes to the financial statements. is theoretically desirable but not practical because the costs of complete disclosure exceed the benefits. is demonstrated by the inclusion of information such as contingencies.
- What terms can be used to express an unmodified opinion on financial statements prepared in accordance with a fair presentation framework? O a. Present fairly, in all material respects O b. Financial statements are materially misstated and pervasive O . Subject to O d. With the foregoing explanationIn IFRS, the conceptual framework indicates appropriate accounting when a more specific accounting standard does not apply. True FalseCompiled financial statements may omit note disclosures. True or False?