Which of the following statements is false?
A) One approach to curtailing creative accounting is to have stronger legal backing for accounting standards
B) One approach to curtailing creative accounting is to move away from cash flow accounting to providing more accruals based information
C) One approach to curtailing creative accounting is to enhance the role of international accounting standards
D) One approach to curtailing creative accounting is to move towards a current cost accounting approach to asset valuation

Question

Quizplus · Accepted Answer

Moving away from cash flow accounting and providing more accruals based information would not necessarily deter creative accounting. In fact, creative accounting can still occur within accruals based accounting methods. The other statements are true as stronger legal backing for accounting standards, enhancing the role of international accounting standards, and using a current cost accounting approach to asset valuation can deter or limit creative accounting practices.

Which of the Following Statements Is False