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Why is an entity permitted to change an accounting policy

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Reference no: EM132696701

Problem 1: A change in accounting policy shall be made when

I. Required by law.

II. Required by an accounting standard.

III. The change will result in more relevant or reliable information about the financial position, financial performance and cash flow of the entity. a. I and III only

b. II and III only

c. I and II only

d. I, II and III

Problem 2: Why is an entity permitted to change an accounting policy?

a. The change would allow the entity to present a more favorable profit picture.

b. The change would result in the financial statements providing more reliable and relevant information about financial position, financial performance and cash flows.

c. The change is made by the internal auditor.

d. The change is made by the CPA.

Reference no: EM132696701

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