Auditors Need Only Understand the Rules of Accounting as the Principles

question 70

True/False

Auditors need only understand the rules of accounting as the principles are outdated.

Comprehend the difference in goodwill recognition under different accounting methods.

Learn how monetary assets from foreign currency transactions are reported.

Understand the concept of noncontrolling (minority) interest in a subsidiary.

Know the consolidation procedures for wholly and partially owned subsidiaries.

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Definitions:

Successful-efforts Method

An accounting approach used in the oil and gas industry to capitalize only those costs associated with successfully locating new oil and natural gas reserves.

Full-cost Method

An accounting practice where all direct and indirect costs of producing an asset are capitalized and then amortized over time.

IFRS

IFRS stands for International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) that is globally recognized for preparing financial statements.

GAAP

Widely recognized accounting norms and criteria in the U.S. that guide financial statements.