Essay Example on According to Generally Accepted Accounting Principles GAAP

Question 1 According to Generally Accepted Accounting Principles GAAP the expense recognition principle is defined that expense is recognized in the same period that the related revenue is recognized under the accrual basis accounting This is a matching principle that the expenses should match up with the related revenue in the correct accounting period The main purpose of the financial statements is to provide its users with accurate and complete financial data and information regarding an organization's business operation Revenue and expenses are two key operational records in alignment in income statement at the same reporting period to reflect the result of the operation within a timeline The indicators of income statements such as revenue expense gross profit would be evaluated by the financial statements users for any decision making such as investing By manipulating matching principle the expenses are not assured to match the related revenue in the same accounting period this would lead to the failure of the evaluation of the financial statements and the users would suffer from investing risks and monetary losses Question 

 At the same time the evidence should be relevant and reliable to provide strong support for making the decision if Waste Management made the appropriate decision in changing the estimates related to the useful life and salvage value of the assets Question 5 Yes you can report a violation to the PCAOB anonymously Per the guidelines of the tip and referral center anonymity is permitted However when you report a violation to the PCAOB with anonymity you will be asked to contact PCAOB again within 24 hours to provide any more information by answering the questions regarding your tip or referral Yes I believe that the employee had a responsibility to report the behavior to the audit committee if the employee knew that the consolidating entries in the fourth quarter recorded by upper management were fraudulent PCAOB is established to oversee the public companies to protect massive investors from investing risks and losses by any potential violations or fraud from financial reporting If the PCAOB can obtain any tips and referrals from the public timely and actively the potential violations would be stopped and prevented from getting worse Also the whistleblower is protected by the Occupational Safety Health Administration OSHA The whistleblower is encouraged with rewards for the successful tips or referrals