I - A. " Representational faithfulness is accomplished when transactions and events affecting the entity are presented in financial statements in a manner that is in agreement with the actual underlying transactions and events" (CICA, Financial statement Concepts 1000.21 (a), 2003). It means that all of information in the financial statement such as numbers and descriptions must be factual. The independent auditors checked the computer ID tags on each piece of equipment to confirm the actual numbers, and for that reason Byrn Company observes the representational faithfulness that is one of subsets of reliability.
I - B. "The consistency principle states that businesses should use the same accounting methods and procedures from period to period" (Harrison, Horngren, Lemon, & Lemon, 2004, p. 279) Hence the financial statement of Carroll Company violates the consistency principle.
I - C. "The time-period concept ensures that accounting information is reported at regular......
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