After finalizing the audit of Harmony Haven Emporium, the chief executive officer (CEO) inquires about...
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Accounting
After finalizing the audit of Harmony Haven Emporium, the chief executive officer (CEO) inquires about the interpretation of the expression "in conformity with generally accepted accounting principles" present in the audit report relating to the financial statements managed by the company. He notices that the phrase's significance extends beyond his initial understanding, which he limited to the concept of "principles."
Required:
Elaborate on the definition of the phrase "accounting principles" as utilized in the audit report. (Exclude any discussion pertaining to the significance of the term "generally accepted" in this explanation.)
The president is seeking an understanding of the process through which an accounting principle attains the status of being "generally accepted." Draft a concise message that addresses the CEO's inquiry.
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