Explain how Sarbanes-Oxley of 2002 significantly changes how the FASB will operate in the future.
What will be an ideal response?
ANSWER:
The FASB’s funding originally came from accounting firm contributions and publication sales. Sarbanes-Oxley now requires that FASB be funded through an assessment of annual fees on public companies and accountants. This change increases FASB’s independence from the constituents it serves, but increases its dependence on the SEC. Now the SEC potentially controls FASB’s funding by its recognition. If not recognized by the SEC, FASB cannot assess fees required for operations. Laws are now in place to make movement to 100% government regulation relatively simple should the FASB fail to restore the public’s confidence in the accounting profession.
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What is the best way an auditor can detect fraud in the financial statements?
a. Use professional skepticism. b. Understand Generally Accepted Accounting Standards. c. Brainstorm with the client to find the types of fraud occurring. d. Actively search for errors in the financial statements.
The inventory costing method that reflects the cost flow in the reverse order and will report the earliest costs in ending inventory is
A) First in first out B) Last in first out C) Average cost D) Specific identification
The law courts of the English common law emphasized legal procedure over the merits of an individual case
Indicate whether the statement is true or false
What is human capital?
What will be an ideal response?