Preparation of Financial Statements

With regards to the preparation of financial statements, the AICPA Code of Professional Conduct (2014) includes key points as to the knowing misrepresentation of the statements, submission of financial statements, negligence in preparation, and subordination of judgment. The knowing misrepresentation of financial statements in the course of their preparation occurs if a member issues or permits the issue of misleading financial statements.

We will write a
custom essay
specifically for you

for only $16.05 $11/page
308 certified writers online
Learn More

It is also applicable when a member is unsuccessful in correcting false information when having authority to do so; and when a member signs (or permits others to sign) documents that contain misleading or false financial statement information. It is also stated (under rule 1.130.020) that a member is prohibited from intentional misrepresentation of facts or “subordinating his or her judgments when performing professional services” (AICPA Code of Professional Conduct, 2014, p. 63).

When submitting a financial statement, a member must comply with the “Compliance with Standards Rule” presented in the AICPA Code of Professional Conduct. The violations associated with the negligence in the preparation of financial statements are similar to those for the knowing misrepresentation, although the motive (knowing or unknowing) is considered different.

The standards regarding the preparation of financial statements have been updated recently (2014), so the information presented in the AICPA Code of Professional Conduct is reliable and relevant. However, some points, for example, negligence and misrepresentation of financial statements contain similar information and are presented in a way that may be misleading to some. It would have been effective to give definitions of negligence and misrepresentation so that there is a clear differentiation between the two.

On the other hand, it is important to stress the negative implications of both negligence and misrepresentation because either intentional or not, the preparation of false financial statement documentation goes against the AICPA Code of Professional Conduct.

References

AICPA Code of Professional Conduct. (2014). Web.

FACB Accounting Standards Codification. (n.d.). Web.

Get your
100% original paper
on any topic

done in as little as
3 hours
Learn More
Print Сite this

Cite this paper

Select style

Reference

StudyCorgi. (2021, March 19). Preparation of Financial Statements. Retrieved from https://studycorgi.com/preparation-of-financial-statements/

Work Cited

"Preparation of Financial Statements." StudyCorgi, 19 Mar. 2021, studycorgi.com/preparation-of-financial-statements/.

1. StudyCorgi. "Preparation of Financial Statements." March 19, 2021. https://studycorgi.com/preparation-of-financial-statements/.


Bibliography


StudyCorgi. "Preparation of Financial Statements." March 19, 2021. https://studycorgi.com/preparation-of-financial-statements/.

References

StudyCorgi. 2021. "Preparation of Financial Statements." March 19, 2021. https://studycorgi.com/preparation-of-financial-statements/.

References

StudyCorgi. (2021) 'Preparation of Financial Statements'. 19 March.

Copy to clipboard

This paper was written and submitted to our database by a student to assist your with your own studies. You are free to use it to write your own assignment, however you must reference it properly.

If you are the original creator of this paper and no longer wish to have it published on StudyCorgi, request the removal.

Psst... Stuck with your
assignment? 😱
Susan
Online
Psst... Stuck with your assignment? 😱
Do you need an essay to be done?
Yes
What type of assignment 📝 do you need?
Yes
How many pages (words) do you need? Let's see if we can help you!
Yes