How does the public good of accounting information lead to underproduction in a free market?

Q: Provide an example of a conservative accounting practice. Why is this practice conservative?

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Q: Explain the difference between conservative and aggressive accounting practices.

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Q: What is the Machiavellian approach to decision making?

A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: Discuss how earnings management is used as a tool to reduce sensitivity to political pressure.

A: Earning management is being associated with the use of discretionary accounting accruals in order to…

Q: Shareholders are extemal users of accounting information.

A: Shareholders are the owners of the company who own its share capital.

Q: Define materiality.  How does materiality come into play when assessing financial statement…

A: Materiality is the threshold above which missing or incorrect information in the financial…

Q: Economic consequences of accounting standard-setting means:a. standard-setters must give fi rst…

A: Financial reporting:

Q: Could a privately held company benefit from usingGAAP accounting, e

A: The Financial Accounting Standards Board publishes generally accepted accounting principles (GAAP),…

Q: The primary financial market does not ensure the collection of saved income from holders of…

A: Fresh stocks and bonds are issued to the public for the first time on the primary market. Investors…

Q: What conflicts of interest can arise between managers and stockholders?

A: Stockholders also knowns as shareholder is an individual, firm, or institution which owns at least…

Q: 1.Which of the following situations could be evidence that the investor lacks the capacity to…

A: Answer: To exercise significance control over the other company the investor is required to hold…

Q: Do you think that the so-called equity theories of accounting are really theories in the scientific…

A: Yes. equity theories of accounting are really theories in the scientific sense.  the real owners are…

Q: how does being unethical in the financial industry affect communication with clients?

A: In the financial services industry an agent or the concerned company (which is the financial…

Q: Which of the following arguments is not in favour of entities being required to comply with…

A: Accounting Standards are standard set of rules or practices which must be followed at the time of…

Q: Why does business risk vary from industry to industry?

A: Business risk It is the probability of occurrence of an inadequate amount of loss because of…

Q: What can go wrong with financial leverage? Should it be used at all by a business?

A: Financial leverage refers to a term that tells us the use of money which one borrowed means the debt…

Q: Is information a public good? What market failures exist that justify government intervention?

A: Public good  The utilization of things is available for the public that can be utilized without…

Q: What are consequences of false declaration in accounting for creditors, investors and government

A: Stakeholders: Stakeholders envelop all people or gatherings that have a personal stake in the…

Q: What are the ethical and legal implications of using accounting practices such as the book-and-hold…

A: Corporate earnings are the profits of a corporation after all expenditures have been paid. Earnings…

Q: Why do you think companies use revenue recognition as a primary means for inflating profits?

A: Revenue Recognition: Revenue recognition is the recording of revenues in the books of the company…

Q: Having inaccurate financial statements that can harm society would correspond with the ethical…

A: Financial statement:  The income statement, cash flow statement, and balance sheet. Footnotes on…

Q: Why do you believe businesses rely heavily on revenue recognition to inflate profits

A: Here is the Answer

Q: What is the course of action (s) can be used to prevent fraudulent financial reporting in stock…

A: Fraudulent financial reporting  Reckless conduct, acts, or omissions, or Intentional…

Q: Explain how pure risk has an adverse effect on the economy

A: Pure risk is one of the major type of risk which is beyond the control and can affects the economy…

Q: the relative lack of government regulation is an advantage of corporate form of business true…

A: Corporate is the business organization distinct from its members having its own existence.

Q: Which of the following may not be an effect of VAT on the accounting records of a company?   i. The…

A: VAT refers to indirect tax imposed on the sale and purchase of goods and services.

Q: Explain why establishing accounting standards is characterized as a politicalprocess

A: The standard setting process is a political process that is affected by the impact of several…

Q: How do you think accounting irregularities affect the pricing of corporate stock in general? From…

A: Accounting irregularities refer to manipulation in accounts made by the management for the purpose…

Q: Why would a company consider going public?What are some advantages and disadvantages?

A: The name Public Company itself gives a clear idea of what a public company means or stands for. A…

Q: Describe Corporate Gvernance?

A: Corporate governance is the set of rules, procedures, and processes that guide and control a firm.…

Q: Explain what is meant by adverse economic consequences of new or changed accounting standards.

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Q: Which of the following is not an external user of a business’s financial information? Taxing…

A: Financial information: The financial information of the company is used by many internal &…

Q: How can the use of debt serve to discipline managers?

A: A debt in a capital structure is a liability for the company on which company is bound to earn as…

Q: If a particular accounting choice is considered aggressive in nature, then the fi nancialperformance…

A: When a particular accounting choice is considered to be aggressive in nature then it affects the…

Q: hat kinds of limitations exist in analyzing a company just by reading its financial reports?

A: solution financial statements and reports basically means the statement of profit and loss account ,…

Q: Agency costs are best defined as: The cost of conflict between the banks and shareholders O The cost…

A: Agency costs are the internal costs which arise due to the conflict of interest between firm's…

Q: Why is pro forma earnings reporting coming under scrutiny? How can you mitigate the "bad press"…

A: Pro forma earnings reporting refers to those financial statements that have hypothetical amounts as…

Q: What are organizational costs? What are the reasons for and against capitalizing organizational…

A: The first cost of forming a corporation is referred to as an organisational cost or expense. Legal…

Q: t are the main hindrances in valuation estimates in business valuation?

A: Knowing how much an asset is worth and what factors influence its value is essential for making…