Question

You are employed as an accountant for Innovative Computing. Your company is in the process of signing a large contract with an electronics components supplier. You have a friend who works for the electronics components supplier, and you are aware of the company having trouble paying bills. Explain why you should, or should not report, this to your employer before the purchase.

Answer 1

Answer:

According to accounting principle, we should report this as " Full disclosure principle".

Full disclosure principle says that client and per user of business ought not deceive by any absence of data. This standard guarantees that speculator and stakeholders know about each pertinent data about the organization. The primary reason for the full disclosure standard is to dodge accountant not unveiling any data that could influence the business  financial circumstance.

The financial statement ought to be straightforward and incorporate data which can be potential for the business decision of an outsider or about the organization.

Data ought to be revealed or disclosed:-

• Policies of bookkeeping or accounting
• Financial Statement (Including commentaries)
• Any future costs
• Nature of connection among business and different parties
• Non-monetary or non - cash transaction
• Contingent Liabilities and Assets