If the Accounting Profession Were to Replace the Accrual Basis

question 24

Essay

If the accounting profession were to replace the accrual basis of accounting with the cash basis,do you think that financial accounting fraud would increase or decrease? Defend your viewpoint.

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Definitions:

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.

Spreadsheet

A digital tool that allows for the arrangement of data in rows and columns to facilitate calculation, analysis, and storage of information.

Labor Intensive

Describes a process or industry that requires a large amount of human labor to produce its goods or services.

Machine Intensive

Describes a production process or industry that relies heavily on machinery and equipment for manufacturing goods, typically resulting in higher fixed costs.