Explain what is meant by ‘retrospective application’ of an accounting policy

1. Explain what is meant by ‘retrospective application’ of an accounting policy. When does AASB 108 ‘Accounting Policies, Changes in Accounting Estimates and Errors’ require

 

retrospective application of an accounting policy? Are there any exceptions?

2.What is the difference between a ‘retrospective application’ and a ‘retrospective

restatement’? 3. Changes in accounting estimates and errors relate to past reporting periods and as such they are often called ‘prior-period items’. What are the two general ways in which

prior-period items could be treated? Outline the arguments for and against each approach.

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the auditor should ensure control testing is performed for periods both before and after the accounting change became effective.

A major change in the accounting system has taken place during the year. The effect on control testing is that: a. the auditor should ensure control testing is performed for….

select a sample of invoices relating to motor vehicle purchases and ensure they are correctly recorded on the non-current assets master file.

The following represents an existence test for property, plant, and equipment: a. select a sample of items of machinery in the factory and agree that they are correctly recorded in….

The control that would be the most effective in assuring that the proper custody of assets in the investing cycle is maintained is?

The control that would be the most effective in assuring that the proper custody of assets in the investing cycle is maintained is: a. the purchase and sale of investments….