ACCT1006 Study Guide - Midterm Guide: Faithful Representation, Ibm General Parallel File System
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Thursday, 19 September 2019
Objective of GPFR
•Provide ﬁnancial info about the reporting entity that is useful to existing and
potential equity investors, lenders and other creditor sin making their decision
about providing resources to entity"
•For ﬁnancial info to be useful, it should be prepared by ethical accountants and
based on ethical accounting practices"
•Should possess a no. of qualitative characteristics "
Ethics and accountants
•Accountants provide info about business entities that allow users to make
•Ethical behaviour of the accounting profession is necessary to gain users trust
and conﬁdence in their expertise "
•Conﬂict of interest (accounting professional vs other people’s interest): Auditors
paid by ﬁrm they audit. If auditor gives an unfavourable audit report, the audit may
lose the audit business as well"
•Personal: feeling of shame/remorse, being disgraced or discredited "
•Financial: loss of current and future employment, ﬁne, lawsuit "
Fundamental qualitative characteristics"
•Capable of making a diﬀerence to the decision made by users"
•Predictive value and/or conﬁrmatory value"
•Faithful representation: "
•Faithfully represents underlying economic phenomena"
•Complete, neutral and free from error"
Enhancing qualitative characteristics "
Comparability: comparable between diﬀ entities, years "