A change in accounting policy should

Question

Quizplus · Accepted Answer

A change in accounting policy should be based on changes in the underlying economics of business transactions. Accounting policies should reflect the economic substance of transactions, and changes in the underlying economics may result in a need to change accounting policies to better reflect those economics. The other options are incorrect as management's discretion and changes to accounting standards may not necessarily result in improved financial reporting, and improving comparability is a consideration but not the primary factor in determining accounting policies.

A Change in Accounting Policy Should