Purchase Solution

Assess risk and uncertainty in accounting measurements

Not what you're looking for?

Ask Custom Question

Assess the role of risk and uncertainty in accounting measurements.

Purchase this Solution

Solution Summary

The 450 word solution qualifies the types of disclosure risks involved in financial reporting as defined in a SOP. For the two types of risks which are most controversial, further guidance is cited for better understanding.

Solution Preview

Reporting considerations when risk and uncertainty are involved require judgment by the auditors. Although the AICPA and other controlling units have attempted to quantity methodology to deal with risk and uncertainty, each situation is unique and the extent of disclosure must be considered.

Risk can be described in terms of probabilities. Risk concerns a lack of hard data which in turn leads to uncertainty. Uncertainty exists when information is deficient. SOP 94-6 attempted to further define how to deal with significant risks and uncertainties, including required disclosures in four different types of situations:

1. Nature of operations
2. Use of estimates
3. Certain significant estimates
4. Vulnerability due to certain ...

Purchase this Solution


Free BrainMass Quizzes
Operations Management

This quiz tests a student's knowledge about Operations Management

Lean your Process

This quiz will help you understand the basic concepts of Lean.

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.