Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Ahmed Ali (CEO of Oman Cotton Company) has recently reported a 100 million OMR. The Oman Tax Authority has informed company management to move toward

Ahmed Ali (CEO of Oman Cotton Company) has recently reported a 100 million OMR. The Oman Tax Authority has informed company management to move toward applying accounting standards as the company profit reached the threshold. He discussed this matter with their public accounting to understand the accounting framework. The Public Accounting (Ernest and Q Company) explained that the accounting framework is a set of criteria used to measure, recognize, present, and disclose the information appearing in an entity's financial statements. Thus, Oman Cotton Company's financial statements must have been constructed using a recognized framework, or else auditors will not issue a clean audit opinion for them. In other words, they will face auditing challenges. The public accounting firms added that the most used accounting frameworks are generally accepted accounting principles (GAAP) and international financial reporting standards (IFRS). These two frameworks are designed to be broad-based and therefore applicable to most types of businesses. However, the CEO seeks your advice for the following before they finally sign the contract with the auditor.

Explain two Principles and two Assumptions and two Constrains with Examples. (10 marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Cases An Interactive Learning Approach

Authors: Mark S Beasley, Frank A. Buckless, Steven M. Glover, Douglas F Prawitt

7th Edition

0134421825, 9780134421827

Students also viewed these Accounting questions