Under the Existing GAAP Hierarchy for State and Local Government

question 19

Multiple Choice

Under the existing GAAP hierarchy for state and local government financial reporting,the GASB Implementation guides are

• A) More authoritative than GASB Statements.
• B) Less authoritative than GASB Technical Bulletins.
• C) More authoritative than the AICPA state and local government audit guide.
• D) Equally authoritative to GASB Statements.

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Definitions:

Ultra Vires Rule

A legal doctrine that acts performed beyond the scope of a corporation's or entity's powers are invalid.

Business Judgment Rule

A legal principle that protects the decisions made by a corporation's board of directors from being challenged in court, provided they were made in good faith and with reasonable care.

Oppression

The exercise of authority or power in a burdensome, cruel, or unjust manner.

Novation

is the process of substituting a new obligation or contract for an old one, with consent from all parties involved.