How is use of an applicable accounting framework enforced via legislation?
A) The Canada Business Corporations Act and many provincial incorporating acts require that financial statements be prepared in accordance with GAAS as set out in the CPA Canada Handbook.
B) PAs who do not prepare financial statements in accordance with such frameworks are expelled from their professional association.
C) Tax authorities may sue corporations who do not prepare their financial statements in accordance with such frameworks.
D) Financial executives may be sued if the financial statements prepared by their company are not in conformance with such frameworks.

Question

Quizplus · Accepted Answer

The Canada Business Corporations Act and many provincial incorporating acts require that financial statements be prepared in accordance with Generally Accepted Accounting Principles (GAAP) as set out in the CPA Canada Handbook. This is enforced via legislation and failure to comply may result in penalties or legal action. Option B and D are not accurate and option C is a partial answer, as tax authorities may take action against non-compliant corporations, but it is not the only way in which compliance is enforced.

How Is Use of an Applicable Accounting Framework Enforced Via