How Is Use of an Applicable Accounting Framework Enforced Via

question 6

Multiple Choice

How is use of an applicable accounting framework enforced via legislation?

• A) The Canada Business Corporations Act and many provincial incorporating acts require that financial statements be prepared in accordance with GAAS as set out in the CPA Canada Handbook.
• B) PAs who do not prepare financial statements in accordance with such frameworks are expelled from their professional association.
• C) Tax authorities may sue corporations who do not prepare their financial statements in accordance with such frameworks.
• D) Financial executives may be sued if the financial statements prepared by their company are not in conformance with such frameworks.

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Definitions:

Net Inflow

Net inflow refers to the total incoming resources or capital minus the outgoing resources or capital in a particular time period.

Current Account

A component of a country's balance of payments that includes the trade balance, net primary income, and net secondary income, reflecting the difference between a country's savings and its investment.

Capital and Financial Account

A component of a country's balance of payments that records investment flows and purchasing of domestic firms by foreign investors, and vice versa.