Question

At the beginning of 2024, Wagner implemented undertook a variety of changes in accounting methods, corrected several errors, and instituted new accounting policies. What was the purpose of these actions?

1) To improve financial reporting accuracy
2) To increase profits
3) To reduce expenses
4) To comply with new regulations

Answer 1

Wagner's changes in accounting at the start of 2024 were likely to improve financial reporting accuracy, in order to comply with accounting standards and regulations, protect investors, and ensure transparent and accountable financial information.

Step-by-step explanation:

When Wagner implemented a variety of changes in 2024, including changes in accounting methods, correction of errors, and new accounting policies, the likely purpose was to improve financial reporting accuracy. Such actions are generally undertaken to present financial information more clearly and accurately to stakeholders, and in response to changes in regulations or accounting standards. Periodic updates to accounting practices can also ensure compliance with laws such as the Sarbanes-Oxley Act, which was designed to increase confidence in financial information by promoting accountability and transparency in order to protect investors from accounting fraud, and ensure that organizations are not deemed "too big to fail".

This focus on accuracy and compliance helps to promote the financial stability of the United States, protect the American taxpayer by ending bailouts, and protect consumers from abusive financial services practices. While improving financial reporting accuracy can indirectly influence profitability and expenses, it is primarily about ensuring that the company's financial statements are reliable and comply with relevant financial regulations.