Choose the letter that correponds to the answer. I onlyBoth I and IIС.а.II onlyd. Neither I nor IIb. An entity can rectify inappropriate accounting policies eitherby disclosure of the accounting policies used or by notes or1. Which of the following statements is correct?1. When an entity has departed from a requirement of PFRS/IFRSin prior period, and that departure affects the amounts in thefinancial statements for the current period, it shall make ulonecessary adjustments.II. An entity can rectify inappropriate accounting policies elureby disclosure of the accounting policies used orexplanatory material.by notes or

Answered: I only С. Both I and II а. II only d.…

Business

Accounting

I only С. Both I and II а. II only d. Neither I nor II

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 20MCQ

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Which of the following statements about Accounting Changes isincorrect? A. When retrospective application is impracticable, the entity shall apply the new policy as at the beginning of the earliest period for which restatement is practicable, which may be the current period. A corresponding adjustment to each affected component of equity affected shall be made. B. Retrospective application is applying the new policy to the transactions, other events and conditions occurring after the date as at which the policy is changed and recognizing the effect of the change in the accounting estimate in the current and future periods affected by the change. C. An entity shall correct material prior period errors retrospectively in the first set of financial statements authorized for issue after their discovery by restating the comparative amounts for the prior period(s) presented in which the error occurred. D. Changes in accounting policies do not include applying an accounting policy for…
Which of the following statements about Accounting Changes is incorrect? When retrospective application is impracticable, the entity shall apply the new policy as at the beginning of the earliest period for which restatement is practicable, which may be the current period. A corresponding adjustment to each affected component of equity affected shall be made. Retrospective application is applying the new policy to the transactions, other events and conditions occurring after the date as at which the policy is changed and recognizing the effect of the change in the accounting estimate in the current and future periods affected by the change. An entity shall correct material prior period errors retrospectively in the first set of financial statements authorized for issue after their discovery by restating the comparative amounts for the prior period(s) presented in which the error occurred. Changes in accounting policies do not include applying an…
According to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, an entity must select and apply its accounting policies consistently from one period to the next and among various items in the financial statements. However, an entity may change its accounting policies under certain conditions. Required: Identify the circumstances under which it may be appropriate to change accounting policy in accordance with the guidance given in IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.
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