When is independence required?

Q: Why is the concept of independence such an internal part of AICPA Code?

A: AICPA is American Institute of Certified Public Accountants, which is the leading organisation and…

Q: What are the threats to independence?

A: Given below are the seven threats to auditor’s independence:   Self-review threat: It occurs when…

Q: What are agency conflicts? What groups can have agency conflicts?

A: Introduction: The problem or conflict of the entity occurs as a result of conflict between two…

Q: Explain Regulatory Provisions?

A: Regulations: The regulation is processed by which a complex system is managed under a set of rules.

Q: What is preemptive rights offering?

A: Preemptive rights:  A contractual clause that provides the shareholders with a right to purchase the…

Q: What is Glass-Steagall Act?

A: Glass-Steagall Act splits up the investment and commercial banking segments of an investment bank.

Q: What does overstated mean?

A: Definition of Overstated:- Overstated uses two way terms by accountant: The entered or reported…

Q: What is the relationship between principle-agency theory, separation of ownership, and controversy?

A: Corporation there are shareholders who are the owners of the company but they do not run the company…

Q: What is a standby commitment? When and why is it used?

A: A formal contract between a borrower and bank, that the bank will lend a certain amount to him/her…

Q: What is a statement of circumstances?

A: The external auditor is expected to lodge a statement of circumstances at the company's registered…

Q: Why is a preemptive right important?

A: Preemptive rights means the rights to  be offered to purchase a property before it is offered to…

Q: What are “participation rights”?

A: Convertible securities: Convertible security is a security that has the potential to be converted…

Q: What is a reasonableness test?

A: Reasonableness tests is an analytical procedure used to examine the validity of the accounting…

Q: What is the purpose of the Maceda Law?

A: The Maceda Law, also known as The Realty Installment Buyer Act or Republic Act 6552 is the law that…

Q: What is inshoring?

A: It is the opposite of offshoring. Inshoring is a process wherein the business is moved back from…

Q: Which statement is correct?

A: A current ratio is one of the ratios used to assess the liquidity of the company. It shows that the…

Q: What are threats and safeguards to independence?

A: American Institute of Certified Public Accountants (AICPA):   It is an association of certified…

Q: What are the Safeguards to independence?

A:

Q: What is a constraint?

A: Internal Control:   It refers to a set of rules, policies adopted by a business to ensure accuracy…

Q: What is discretionary reporting?

A:

Q: on based

A: There are three main models of the judicial decision-making that explain how judges come to a…

Q: What are Subsequent Events and what do they require?

A: Auditing:   It is a systematic verification of the books of accounts of an organization by an…

Q: What are the approaches to negotiation?

A:

Q: What is the Rights Issue?

A: The Rights issue is the issue of a definite proportion of Shares to the existing shareholders of the…

Q: What are the two primary reasons for using preemptive rights?

A: The right of the shareholders of a company to buy additional shares in any future issue of the…

Q: What is management by exception?

A: Management by Exception: Management by exception is one of the management styles where the…

Q: Who are stakeholders?

A: Stock: It refers to a security issued in a form of certificate. It implies the right of ownership of…

Q: How is the term "confidentiality" different from "privacy"? Explain.

A: Answer: The terms Confidentiality and Privacy are different terms. Privacy is all about person and…

Q: What is accountability

A: The transactions that are happened in the company will be analyzed, and recorded in the first book…

Q: State difference between sureties and security?

A: In development contracts, if a worker for hire neglects to play out the works, the business would…

Q: Why is a policy statement important?

A: A policy statement or an investment policy statement is a document created by the investment…

Q: Why is EBITDA controversial?

A: Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is a metric used to assess…

Q: What is the make or buy decision?

A: Managerial accounting:   Managerial accounting is more focused towards analyzing information and…

Q: What is covered by Regulation S–X?

A: Regulation S-X is a U.S. Securities and Exchange Commission rule that covers annual reports from…

Q: What are substantive participating non-controlling rights?

A: Noncontrolling rights that allow the noncontrolling shareholder to participate in either corporate…

Q: what is materiality?

A: Materiality is an accounting concept that signifies the importance of an item to users of financial…

Q: What is the SEC and what role does it play?

A: SEC stands for Securities and Exchange Commission. It is an agency of United States, which is a…

Q: In what situation should you MAKE?

A: Make or Buy: Make or Buy decision are normal condition arises in front of management due to…

Q: . What is the economic and political environment in which standard setting occurs?

A: Definition: Accounting is primarily concerned with identifying, recording, measuring, summarizing…

Q: What is conflict of interest?

A: Conflict of interest: Conflict of interest occurs when a person derives personal benefits by…

Q: What is the full disclosure principle?

A: Principles are followed by the business for preparing financial reports.

Adverse Selection