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Question 13CA-c

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Intermediate Accounting (Kieso)
Found in: Page 25

Short Answer

ETHICS (Rule-Making Issues) When the FASB issues new pronouncements, the implementation date is usually 12 months from date of issuance, with early implementation encouraged. Karen Weller, controller, discusses with her financial vice president the need for early implementation of a rule that would result in a fairer presentation of the company’s financial condition and earnings. When the financial vice president determines that early implementation of the rule will adversely affect the reported net income for the year, he discourages Weller from implementing the rule until it is required.

Instructions: Answer the following questions.(c) What does Weller have to gain by advocacy of early implementation?

As Weller is the controller so, by advocating early implementation, she is fulfilling her responsibility.

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Step by Step Solution

Meaning of Decision Making

The term decision making refers to the process of selecting the best option out of all the available alternatives after analyzing various information and results. It helps the business to be ethical.

Explanation

It is the duty of the accountant to provide financial statements that represent a true and fair view of the financial condition of the business. Therefore, Weller performs her work by advocating early implementation.

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