1. Accounting changes can have direct and indirect effects on financial statement presentation. Discuss how accounting changes can alter a presentation. 2. Some inventory errors are said to be "self-correcting," in that the error has the opposite financial statement effect in the period following the error, thereby "correcting," the original account balance errors. Required: Despite this self-correcting feature, discuss why these errors should not be ignored and describe the steps required to account for the error correction. 3.The balance sheet is one of the key financial statements because it shows the state of affairs of the business entity at a point in time. However, some individuals are of the view that the cash flow statement provides more valuable information. Discuss the merits of both statements in ensuring the effective management of the financial resources of the business entity. 2