Aggressive Accounting Policies Used in Financial Statements Accounting Essay
It is critical that users of financial statements carefully review the accounting policies disclosed in the financial statements to understand how the entity has applied the accounting policies and to make informed decisions. a major change has taken place where “Significant Accounting Policies” will be replaced by 'Material'. A financial report that looks impressive may be the result of aggressive accounting policies. The company that has reported modest profits may be doing so with very conservative accounting. Accounting was influenced by the flexibility of international accounting regulations. position and corporate performance. Keyword ds. Assessing the relevance of an accounting method to the decisions of users of financial statements requires assessing the ability of managers to use that method to manipulate accounting figures and commit fraud. This essay examines the nature of flexibility in accounting, why it exists, and its implications for financial reporting. Flexibility in accounting as opposed to rigidity or uniformity in accounting.