The Accounting Profession Recognises the Need for Uniformity in Reporting

question 67

Multiple Choice

The accounting profession recognises the need for uniformity in reporting:

• A) as a means of avoiding confusion.
• B) because ASA 700 and ASA 705 have defined and enumerated the types of audit reports that should be included with general-purpose financial reports.
• C) because users would have considerable difficulty interpreting the meaning of an auditor's report if each were an original creation.
• D) all of the above

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Definitions:

Normal Profits

The required minimum level of profit needed for a company to remain competitive in the market; it is part of the firm's opportunity costs.

Short-run Equilibrium

A state in which market supply and demand balance each other, and as a result, prices become stable, often in a temporal context.

Marginal Cost

The cost of producing one additional unit of a product, which can vary as production scales up or down.

Economic Losses

Financial deficits incurred by an individual, organization, or economy stemming from events or actions that reduce wealth or resources.