BACHELOR OF BUSINESS ADMINISTRATION

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BUSINESS ADMINISTRATION

FINANCIAL ACCOUNTING

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Nobes and Parker (2006) argue that there is no ideal model of enforcement of accounting standards which fits all countries as it depends on the overall regulatory system of the country. Two types of mechanisms, ____, can be used to enforce accounting regulations, helping to ensure quality in the financial reporting practices of a country (Craig & Diga, 1996; Saudagaran & Diga, 2000).
A
positive and negative
B
conservatism and pluralism
C
proactive and energetic
D
preventive and punitive
Explanation: 

Detailed explanation-1: -Can the IASB enforce the use of its standards? If not, what entities can? The IASB cannot enforce the use of its standards because each country follows its own local regulations for the preparation and reporting of financial statements.

Detailed explanation-2: -Responsibility for enforcement and shaping of generally accepted accounting principles (GAAP) falls to two organizations: The Financial Accounting Standards Board (FASB) and Securities and Exchange Commission (SEC). The SEC has the authority to both set and enforce accounting standards.

Detailed explanation-3: -In case there is any conflict between provisions of any applicable Act and Accounting Standard (AS), the provisions of the Act shall prevail to that extent.

There is 1 question to complete.
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