Advanced Accounting
14th Edition
ISBN: 9781260726435
Author: Joe Ben Hoyle
Publisher: Mcgraw-hill Higher Education (us)
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Question
Chapter 17, Problem 3P
To determine
Identify the correct option out of the given statements.
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The accountants for a city are attempting to determine the proper reporting for a new transaction so that the financial statements are in conformity with generally accepted accounting principles. No authoritative answer can be found. What should happen next?
The city will receive a qualified audit report on its financial statements.
The accountants can report the transaction in the way that they believe is best.
The accountants should study other nonauthoritative sources such as GASB Concepts Statements and the official standards produced by FASB.
The city will separate the transaction and report it separately in such a way as to draw attention to the method of reporting that was followed.
City government officials are analyzing a complicated financial transaction. A GASB Implementation Guide seems to provide one reporting answer and a GASB Concepts Statement seems to provide a different answer. What reporting is most appropriate?
The government can use either method and still be in conformity with GAAP.
Government officials should follow the guidance provided by the GASB Implementation Guide.
The city’s financial statements must be in conformity with the GASB Concepts Statement.
The city’s accountants should seek some type of compromise that takes both of these pronouncements into consideration.
Prior to accepting a new audit engagement, a public accounting firm shoulda. Attempt to contact the predecessor auditors.b. Evaluate the integrity of management.c. Assess the firm’s resources to ensure that they are sufficient to permit the firm to accept the engagement.d. All of the above.
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