Answered: What are interim reports? Why is a…

What are interim reports? Why is a complete set of financial statements often not provided with interim data? What are the accounting problems related to the presentation of interim data?

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter17: Other Services Provided By Audit Firms

Section: Chapter Questions

Problem 43RSCQ

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What are interim reports? Why are balance sheets often not provided with interim data?
What are interim financial statements? Do accounts thatappear in a company’s interim balance sheet require anyspecial computations to be reported correctly? Explain.
What is the difference between reporting accounting changes, changes in estimates, and error corrections. Provide an example of each and discuss the effect on the financial statements.
How should a change in accounting estimate be recognized and disclosed in the financial statements?
Which type of accounting change should always be accounted for in current and future periods? Change in accounting policy Change in reporting entity Change in accounting estimate Correction of an error
What is the indirect effect of a change in accounting policy? Briefly describe the approach to reporting the indirect effects of a change in accounting policy under IFRS.
The change in accounting estimate should be treated currently and prospectively. True or false
Prospective application of recognizing the effect of a change in an accounting estimate means A. correcting the recognition, measurement and disclosure of amounts of elements of financial statements as if a prior period error had never occured B. recognizing the effect of the change in the accounting estimate in the current and future periods affected by the change C. applying a new accounting policy to transactions other events and conditions as if the policy had always been applied D. Any of the choices
Which of the following is not classified as an accounting change by IFRS?(a) Change in accounting policy.(b) Change in accounting estimate.(c) Errors in fi nancial statements.(d) None of the above.
Define a change in estimate and provide an example. When is a change in accounting principle responsible for a change in accounting estimate?
Which of the following is not classified as an accounting change by IFRS? a. Change in accounting policy. b. Change in accounting estimate. c. Errors in financial statements. d. None of the above.