When the Accounting Standards Board issues new standards, the implementation dat

Question

When the Accounting Standards Board issues new standards, the implementation date is usually 12 months after the issue date, but early implementation is encouraged. As the Controller for Wheelz Manuafacturing your are discussing their financial statements with Wheelz' vice-president the need for early implementation of a standard that would result in a fairer presentation of the company's financial condition and earnings. When the vice-president determines that early implementatino of the standard will lower the reported net income for the year, he discourages you from implementing the standard until it is requried. Discuss the ethical issues you will need consider in making your decision to implement or not.

Explanation / Answer

As per ethical norms, Stakeholders should get fair results of the comany. it would not be true and fair view, if shareholders would not get fairer results.

As per new standard, it is clear that early implementatino of the standard will lower the reported net income for the year but it would be fairer presentation of the company's financial condition and earnings.

So, in the interest of stakeholder, comapny should implement standard earlier.

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.