- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 2. Analyzing Income Statements
- Subject 4. Non-Recurring Items
CFA Practice Question
Which is the most correct statement? Accounting changes can be undertaken ______.
B. either voluntarily by the firm or when mandated by accounting standards
C. in accordance with GAAP
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 3
| 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. |
| Fortschrit | I agree that it would be good to get an explanation on why c is wrong here. |