explain when and why the users of financial statements are not able to detect earnings management.

Q: Explain the problems associated with inappropriate accounting practices.

A: Fraud: Fraud is a malicious act committed by people to fulfill their personal benefits. In case of…

Q: A theoretical measure does of income does not exist in the real world in which accountant must…

A: The theoretically correct measure of the income refers to the firm net income which determined on…

Q: Please explain in your own words the issues that a financial analyst may encounter without…

A: The ledger accounts will be prepared taking the journal as the source document. The ledger accounts…

Q: A disadvantage of basing bad debt expense on the historical relationship between actual bad debts…

A: Bad Debt expense is the estimate of debts which can be bad or uncollectible. When company has…

Q: Explain fraudulent financial reporting.

A: The examples of fraudulent financial reporting are:  • Modifying the time of recording sales to…

Q: Below are the limitation of financial statements .Please suggest ways to overcome them : -The…

A: Limitation of Financial Statement There  are number of limitation which are involved with the…

Q: State some of the more serious problems encountered in seeking to achieve the ideal measurement of…

A: Net income: The amount which is computed by summing up all the revenues received during a specific…

Q: I am stuck on preparing a multi step income statement and statement of retained earnings

A: Multi step income statement of business shows all revenues and expenses of business and at the end…

Q: Under SFAS 130, Reporting Comprehensive Income, corrections of errors are reported in

A: Correction of error includes rectify the wrong entry recorded in previous year or year before that.…

Q: Why would a client ask an accountant to report on a financial statement element?

A: Definition:

Q: An accountant need not assess compliance with independence rules duringa. An examination of…

A:

Q: A complete set of financial statements does not include a Select the correct response: statement of…

A: Hi student Since there are multiple questions, we will answer only first question.  Accounting is…

Q: The following situations represent errors and frauds that could occur in financial…

A:

Q: A company can use comparisons of its financial data to the data of other companies and industry…

A: In order to evaluate the companies position, a company can take various measures

Q: Explain why the following statement is true: “The retained earningsaccount, as reported on the…

A: The account of retained earnings is helpful in indicating the claim with respect to the asset.…

Q: A financial statement user can not gain a complete understanding of the financial statements…

A: A Financial Statement is the Statement which company prepares to show their business activities and…

Q: When analyzing a company's financial report, what are the most likely indicators that a company is…

A: A tax is a financial charge imposed by government. It is a source of income for the governments to…

Q: What practical difficulties are encountered by a trader due to incompleteness of accounting records?

A: Some practical difficulties are encountered by a trader due to incompleteness of accounting records…

Q: Aren't we being too restrictive on focusing only on the numerical results of not just the financial…

A: The ledger accounts will be prepared taking the journal as the source document. The ledger accounts…

Q: Any time management makes an estimate, there is the risk of earnings management or fraud. Accounting…

A: Earning Management and Bad debts Earning management is the important department in every company. In…

Q: Why do you think " Gross versus Net"  became such a big  issue in accounting?

A: Gross includes all the deduction such as return, allowance, depreciation, and others while the net…

Q: As An accountant, how would you use lay off decisions

A: Accountant refers to a person who professionally performs accounting measures such as accounting…

Q: Explain when and why the users of financial statements are not able to detect earnings management.

A: Earning management means making the financial statement as per managements requirements and…

Q: Why are some managers motivated to manipulate amounts reported in the financial statements?

A: Financial statements are prepared at the end of the year to analyse the financial position and cash…

Q: Which one is not the fraudulent financial reporting? Select one: a. Cash shortage b. Lack of working…

A: Fraudulent financial reporting :              The fraud practices which hinders the objective of…

Q: Indicate whether the following statements are (True) or (False) and correct the false statements:…

A: The financial manager prepares financial statements that recognize revenue at the point of sale and…

Q: Refer to the Focus on Fraud feature Common Types of Earnings Management Techniques Involving…

A: Earning Management Techniques This technique is used the company to improve the quality of the…

Q: Which of the following is not included in the financial statements prepared by accountants?

A: The answer is option (b) Trail  balance

Q: Explain why the following statement is true: The retained earnings account reportedon the balance…

A: Retained Earnings are the portion of a business’s profits that are not distributed as dividends to…

Q: Needles talks about the use of a continuum ranging from questionable or highly conservative to fraud…

A: Definition: Earnings: The bottom line of an income statement which is the result of excess earnings…

Q: Comment on the statement that what a company’s income statement reveals is interesting, but what it…

A: Income statement: The financial statement which reports revenues and expenses from business…

Q: A company has a history of losses and has a negative balance (a debit) in retained earnings. On the…

A: The retained earnings comprises of net income or losses of the prior period.

Q: f In addition to the risk factor identified in the preceding question, another risk factor relating…

A: The question is based on the concept of Financial Accounting.

Q: Financial accounting examines monetary and non-monetary events. Select one: True False

A: Financial accounting : Financial Accounting is the process of recording,summerizing and reporting a…

Q: Explain the difference between earnings management and financial statement fraud.

A: Definition: Fraud: It refers to the intentional misrepresentation of the financial information or…

Q: Technical analysts feel that financial accounting statements lack information, or report it in a way…

A: Technical analysis is a method to analyse the price movement of stocks and other securities for…

Q: Which of the following situations would raise an auditor's concern about the risk of fraudulent…

A: SOLUTION- Fraudulent financial reporting is the intentional misrepresentation of a firm's financial…

Q: How can adjustments to the standardized financial statements be made in order to undo these…

A: Accounting distortions are differences between the data shown in financial statements and actual…

Q: In current practice, accounting provides only quantitative information that is useful in making…

A: Here asked about the True / False which are provided the details of the statement which are related…

Q: What is earnings management? Illustrate your answer with examples of Balance Sheet items that…

A: Financial reporting assists the intended users of financial statements, such as shareholders,…

Q: How can you tell the difference between accounting mistakes and accounting fraud in financial…

A: This question tells about the difference between accounting mistakes and accounting fraud in…

Q: Financial accounting is concerned with how and why profits arise. Select one: True False

A:

Q: What difficulties do differences in accounting standards create for investors?

A: Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

Q: Discuss the types of errors in financial accounting and explain why some errors need to go through…

A: Accounting errors are the events which occur unintentionally and not for misleading the information…