Question
(c) Due to Covid-19, the company has not been performing well. Thus, the CEO asked the accountant to change the inventory method to report better
(c) Due to Covid-19, the company has not been performing well. Thus, the CEO asked the accountant to change the inventory method to report better financial performance. The CEO explained that the accounting standards allow companies to change inventory methods. The CEO added that the accountant can always switch back the inventory method when things return to normal after Covid-19. Explain whether you agree or disagree with the CEO to change the inventory method for earnings management purpose. You should also discuss the impacts on the users of the financial statements. (15 marks)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started