Choose the incorrect statement below: A. An entity shall select and apply different accounting policies each period in order to achieve comparability of financial statements. B. A change in reporting entity is actually a change in accounting policy and therefore shall be treated retrospectively to disclose what the statements would have looked like if the current entity had been in existence in the prior year. C. Prior period errors are retrospectively corrected by adjusting the beginning balance of retained earnings and affected assets and liabilities. D. Changes in accounting estimates are to be handled currently and prospectively, if necessary.
Choose the incorrect statement below: A. An entity shall select and apply different accounting policies each period in order to achieve comparability of financial statements. B. A change in reporting entity is actually a change in accounting policy and therefore shall be treated retrospectively to disclose what the statements would have looked like if the current entity had been in existence in the prior year. C. Prior period errors are retrospectively corrected by adjusting the beginning balance of retained earnings and affected assets and liabilities. D. Changes in accounting estimates are to be handled currently and prospectively, if necessary.
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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Question
Choose the incorrect statement below:
A. An entity shall select and apply different accounting policies each period in order to achieve comparability of financial statements.
B. A change in reporting entity is actually a change in accounting policy and therefore shall be treated retrospectively to disclose what the statements would have looked like if the current entity had been in existence in the prior year.
C. Prior period errors are retrospectively corrected by adjusting the beginning balance of
D. Changes in accounting estimates are to be handled currently and prospectively, if necessary.
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