On what criteria is a 'reporting entity',as defined in SAC 1,dependent?
A) Whether there are users that are dependent on the reports to make or evaluate resource decisions
B) Professional judgment providing some guidelines to help make a decision
C) Whether there are users that are dependent on the reports to make or evaluate resource decisions, and professional judgement provides some guidelines to help make a decision
D) The Corporations Law based on measures of gross revenue, dollar value of assets and the number of employees

Question

Quizplus · Accepted Answer

According to SAC 1, a 'reporting entity' is dependent on whether there are users that are dependent on the reports to make or evaluate resource decisions, and professional judgement provides some guidelines to help make a decision. The Corporations Law may use measures of gross revenue, dollar value of assets and the number of employees as criteria, but SAC 1 is not solely dependent on these measures. Therefore, options A and D are incorrect. Option B mentions professional judgment, but does not include the crucial criterion of user dependence on the reports.

On What Criteria Is a 'Reporting Entity',as Defined in SAC