Fred argues, “The standards that I like most are the ones that eliminate all management discretion in reporting—that way I get uniform numbers across all companies and don’t have to worry about doing accounting analysis.” Do you agree? Why or why not?
Answer to relevant QuestionsBill Simon says, “We should get rid of the FASB and SEC since free market forces will make sure that companies report reliable information.” Do you agree? Why or why not?Fair value accounting attempts to make financial information more relevant to financial statement users, at the risk of greater subjectivity. What factors would you examine to evaluate the reliability of fair valued assets?The cigarette industry is subject to litigation for health hazards posed by its products. The industry has been in an ongoing process of negotiating a settlement of these claims with state and federal governments. As the CFO ...What are the reasons for a firm having lower cash from operations than working capital from operations? What are the possible interpretations of these reasons?How would the following events (reported this year) affect your forecasts of a firm’s future net income?
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