CFA Practice Question

There are 534 practice questions for this study session.

CFA Practice Question

Which is the most correct statement? Accounting changes can be undertaken ______.

A. when mandated by accounting standards
B. either voluntarily by the firm or when mandated by accounting standards
C. in accordance with GAAP
Correct Answer: B

Accounting changes can be undertaken either voluntarily by a firm or when mandated by accounting standards.

User Contributed Comments 2

User Comment
Davidrh Why not in accordance with GAAP? Don't GAAP regulate, whether a firm MUST change or MAY change accounting procedures?

A firm can't change accounting procedures voluntarily unless allowed by GAAP (if they want to be in compliance).

An explanation would be greatly appreciated.
jzty For example, a change of depreciation method will cause accounting changes. This is voluntary by the firm.
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