Some of the items on the balance sheet are based on estimated information. Consider management's responsibility when

Question:

Some of the items on the are based on estimated information. Consider management's responsibility when it comes to the use of estimates (e.g., net realizable value of receivables, valuation of inventories, accumulated depreciation, etc).
1. Describe the incentives management has to misrepresent estimates.
2. With the core values of excellence and integrity in mind, discuss controls and procedures companies can put in place to prevent misrepresentation of these estimates.
What does the concept of objectivity imply for information reported in financial statements?
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...