EBK FINANCIAL ACCOUNTING THEORY AND ANA
12th Edition
ISBN: 9781119299646
Author: CATHEY
Publisher: JOHN WILEY+SONS,INC.-CONSIGNMENT
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Chapter 2, Problem 2.2C
a.
To determine
Introduction: An attempt made by FASB to create concepts for directing the board to establish standards and for providing frame of reference for resolving accounting issues is represented by conceptual framework project.
To indentify: The objectives and goals of conceptual framework project and emerging issues task force.
b.
To determine
Introduction: An attempt made by FASB to create concepts for directing the board to establish standards and for providing frame of reference for resolving accounting issues is represented by conceptual framework project.
The standards overload problem associated with FASB.
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The conceptual framework indicates the desired fundamental and enhancing qualitative characteristics of accounting information.
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characteristics and constraints.
1.
2.
Donald Kirk, former chairman of the FASB, once noted that "... there must
be public confidence that the standard-setting system is credible, that
selection of board members is based on merit and not the influence of
special interests..." Which characteristic is implicit in Mr. Kirk's statement?
3.
4.
Which component would allow a large company to record the purchase of a
$120 printer as an expense rather than capitalizing the printer as an asset?
7.
Allied Appliances, Inc., changed its revenue recognition policies. Which
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financial statements with the SEC. Which characteristic is…
A conceptual framework for financial reporting is a statement of generally accepted theoretical principles, which provide the basis for __________________.
i)Development of new accounting standards
ii)Development of accounting staff through training programs
iii)Evaluation of accounting standards which already in existence.
iv)Developing quality control methods to enhance the quality of products and services.
a.
i) & iii)
b.
ii) & iv)
c.
iii) & iv)
d.
i) & ii)
“A key component of the Accounting Conceptual Framework (ACF) is the qualitative characteristics of useful financial information that includes relevance, faithful representation, and other enhancing qualities for identifying and disclosing financial information.”
Requirements:
By reviewing IFRS 15 and/or IFRS 16, critically evaluate how accounting regulators and practitioners reflect the qualitative characteristics in practice. Your analysis may also highlight any advantages and challenges in respect of applying the qualitative characteristics in any context(s).
Your answer must clearly mention the IFRS(s) chosen and support your critical evaluation by drawing on evidence and arguments from credible, verifiable, and accessible sources e.g., peer-reviewed academic journals, professional publication, books etc.
Chapter 2 Solutions
EBK FINANCIAL ACCOUNTING THEORY AND ANA
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- Which of the following disclosures regarding new accounting standards provides the most meaningful information to an analyst? C . Management is still evaluating the impact.arrow_forwardAnswer the following question and provide detail examples to support your answer. Analyze and make an assessment of the International Accounting Standard Board's (ASB) Conceptual framework 2018 by highlighting its strength and flaws. Afterward, state how would improve it in order to further enhance the relevance and reliability of financial reporting. 2. a) Define the concept of research methodology in the context of accounting theory. Discuss the consequences of choosing an incorrect research methodology in accounting research, highlighting the strengths and limitations of quantitative and qualitative approaches to accounting research. b) Evaluate the role of accounting theories in guiding research in the field of accounting. Discuss how different accounting theories, such as agency theory, positive accounting theory, and institutional theory, influence research questions, hypotheses formulation, and empirical analysis are from each other, highlighting their strengths and…arrow_forward“A key component of the Accounting Conceptual Framework (ACF) is the qualitative characteristics of useful financial information that includes relevance, faithful representation, and other enhancing qualities for identifying and disclosing financial information.” Requirements: By reviewing IFRS 15, critically evaluate how accounting regulators and practitioners reflect the qualitative characteristics in practice. Your analysis may also highlight any advantages and challenges in respect of applying the qualitative characteristics in any context(s). Your answer must clearly mention the IFRS 15 and support your critical evaluation by drawing on evidence and arguments from credible, verifiable, and accessible sources e.g., peer-reviewed academic journals, professional publication, books etc.arrow_forward
- “A key component of the Accounting Conceptual Framework (ACF) is the qualitative characteristics of useful financial information that includes relevance, faithful representation, and other enhancing qualities for identifying and disclosing financial information.” Requirements: By reviewing IFRS 15, critically evaluate how accounting regulators and practitioners reflect the qualitative characteristics in practice. Your analysis may also highlight any advantages and challenges in respect of applying the qualitative characteristics in any context(s). Your answer must clearly mention the IFRS(s) chosen and support your critical evaluation by drawing on evidence and arguments from credible, verifiable, and accessible sources e.g., peer-reviewed academic journals, professional publication, books etc.arrow_forwardChapter 7 of the textbook presents some concerns regarding the current accounting standards for research and development expenditures. Instructions: For this discussion, you will be divided into two groups: Group B: You are assigned to Group B if you have a last name beginning with N-Z. Assume that you are the FASB member. Write a memo defending the current standards regarding research and development. For both groups, your memo should address the following questions: By requiring expensing of R&D, do you think companies will spend less on R&D? Why or why not? What are the possible implications for the competitiveness of U.S. companies? If a company makes a commitment to spend money for R&D, it must believe it has future benefits. Shouldn't these costs therefore be capitalized just like the purchase of any long-lived asset that you believe will have future benefits? Explain your answer. For your initial post, indicate in the subject line which group you are in (Group A…arrow_forward"In light of the evolving business landscape, technological advancements, and global economic interdependencies, critically analyze and discuss the role of fair value accounting in financial reporting. Consider the implications of fair value measurement on the quality of financial information, decision-making by various stakeholders, and the potential impact on financial markets. Additionally, explore the challenges and criticisms associated with fair value accounting, and propose alternative accounting approaches that may address these concerns while ensuring transparency and relevance in financial reporting. Finally, assess the ethical considerations surrounding the application of fair value accounting and its potential effects on corporate governance and stakeholder trust within the context of contemporary business environments."arrow_forward
- Management Discussion and Analysis is required in annual reports filed with the Securities and Exchange Commission. It includes management's analysis of current operations and its plans for the future. Typical items included in the MD&A are as follows: Management's analysis and explanations of any significant changes between the current and prior years' financial statements.Important accounting principles or policies that could affect interpretation of the financial statements, including the effect of changes in accounting principles or the adoption of new accounting principles.Management's assessment of the company's liquidity and the availability of capital to the company.Significant risk exposures that might affect the company.Any “off-balance-sheet” arrangements such as leases not included directly in the financial statements. Such arrangements are discussed in advanced accounting courses and textbooks.Using Google, enter Kroger Annual Report in the search field. Access the…arrow_forwardAdvanced Accounting requires many rules and regulations. The latter come from many sources. In your Journal this week you will research two rules or regulations that pertain to Advanced Accounting topics and submit them to your Unit 1 Journal. For each of the rules or regulations, answer the following questions. What is the name of the rule or regulation? What agency or government created the rule or regulation? Does any agency or government have the power to enforce the rule or regulation? If so how? If not, does this hinder the enforcement of the rule or regulation?arrow_forwardWayne Cooper has some questions regarding the theoretical framework in which GAAP is set. He knows that the FASB and other predecessor organizations have attempted to develop a conceptual framework for accounting theory formulation. Yet, Wayne’s supervisors have indicated that these theoretical frameworks have little value in the practical sense (i.e., in the real world). Wayne did notice that accounting rules seem to be established after the fact rather than before. He thought this indicated a lack of theory structure but never really questioned the process at school because he was too busy doing the homework. Wayne feels that some of his anxiety about accounting theory and accounting semantics could be alleviated by identifying the basic concepts and definitions accepted by the profession and considering them in light of his current work. By doing this, he hopes to develop an appropriate connection between theory and practice. Instructions a. Help Wayne recognize the purpose of…arrow_forward
- The lack of conceptual framework led to the growth of rules-based accounting system which focusing on the accounting treatment based on specific rules or requirements. The conceptual framework resulted in principles-based accounting system, which ensure the accounting standards being developed in agreed conceptual basis focusing on the specific aim or objectives. Materiality has been regarded by International Accounting Standard Board (IASB) as crucial basis in preparing the financial statement. Required: Critically evaluate and analysis why it is important to reflect on the importance of materiality. Your evaluation and analysis should consists of the features and examples of applying materiality in preparing the financial statement.arrow_forwardReview the new revenue recognition guidance issued by the Financial Accounting Standards Board http://www.fasb.org/jsp/FASB/Page/ImageBridgePagecid=1176169257359 and answer the following questions. What is the new standard as of ASC 606? What does that mean to you? What are the recommended steps companies should follow to achieve the core principle? How does this change current GAAP standards? Who is required to adhere to this new standard?arrow_forwardtion As per ISA 700, Which of the following is NOT a specific evaluation while forming an opinion on financial statements? Evaluate whether the financial statements are prepared in all material respects, in accordance with the applicable financial reporting framework. The Accounting policies selected and applied are consistent with financial reporting framework. IThe management's accounting estimates are reasonable and terminology used in the financial statements are appropriate. The financial statements are providing the sufficient disclosures to enable users to understand. While evaluating the management's assessment of the entity as a going concern, the auditor shall consider same time period as covered by management in its assessment, such period shall: At least twelve months from the date of financial statements tion Auditing and Contpdf 10:16 ya EN 餅手 ilarrow_forward
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