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The auditor must state in the auditor's report whether the financial statements are presented in accordance with generally accepted accounting principles. The auditor must identify in the auditor's report those circumstances in which such principles have not been consistently observed in the current period in relation to the preceding period.
Accounting Standards Codification, the only source of authoritative nongovernmental U.S. GAAP. In 2009, the Codification superseded the FASB's Statements of Financial Accounting Standards. 168 standards had been issued before the Codification. Concepts Statements, first issued in 1978. They are part of the FASB's conceptual framework project ...
Voluntary disclosure is the provision of information by a company's management beyond requirements such as generally accepted accounting principles and Securities and Exchange Commission rules, [1] [2] where the information is believed to be relevant to the decision-making of users of the company's annual reports. [2]
In terms of the Conceptual Framework (see "materiality in accounting" above), materiality also has a qualitative aspect. This means that, even if a misstatement is not material in "Dollar" (or other denomination) terms, it may still be material because of its nature. An example is if a disclosure is omitted from the financial statements.
Compliance refers to adhering with the mandated boundaries (laws and regulations) and voluntary boundaries (company's policies, procedures, etc.). [ 9 ] [ 10 ] GRC is a discipline that aims to synchronize information and activity across governance, and compliance in order to operate more efficiently, enable effective information sharing, more ...
The convergence of accounting standards refers to the goal of establishing a single set of accounting standards that will be used internationally. [1] Convergence in some form has been taking place for several decades, [ 2 ] and efforts today include projects that aim to reduce the differences between accounting standards.
A going concern is an accounting term for a business that is assumed will meet its financial obligations when they become due. It functions without the threat of liquidation for the foreseeable future, which is usually regarded as at least the next 12 months or the specified accounting period (the longer of the two).
The interpretation of the economics underlying a transaction and even the wording of the accounting standards can vary between firms. This, along with the fact that a firm's financial statements are the responsibility of the firm's management, allows management to structure transactions to achieve desired accounting results, [2] by choosing an interpretation of the economics underlying the ...