Question
4. Accrual based accounting is a requirement of Generally Accepted Accounting Principles (GAAP). The use of both the Matching Principles and Revenue Recognition Principles has
4. Accrual based accounting is a requirement of Generally Accepted Accounting Principles (GAAP). The use of both the Matching Principles and Revenue Recognition Principles has both benefitted and undermined the reliability of the reporting process. Discuss the implications of accrual based accounting in the financial statement analysis process. Provide specific indicators of problems which might lead an analyst to discover a potential misstatement or misrepresentation in the financial statements. Discuss the impact that restatements have on the credibility of the reporting process
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