Article 1
1. Based on the article for removal of SAC 4, which group do you think were active in raising concerns or submitting submissions when a new accounting standard was mandated?
a. Big 4 accounting firms and Accounting Representative Groups
b. Corporations and Big 4 accounting firms
c. Commerce and Industry Representative Groups
d. Big 4 accounting firms and Academics Group
a. Big 4 accounting firms and Accounting Representative Groups
What is Signalling?
Signalling is linked to impression management whereby the firm acts to influence stakeholder impressions of the firm
The purpose of the International Accounting Standards Board is to
a. issue enforceable standards which regulate the financial accounting and reporting of multinational corporations.
b. develop a uniform currency in which the financial transactions of companies through-out the world would be measured.
c. promote uniform accounting standards among countries of the world.
d. arbitrate accounting disputes between auditors and international companies
c. promote uniform accounting standards among countries of the world.
Differences between Code law countries and Common law countries include:
a. Code law countries are set in private sectors and primarily orientated to investors
b. Common law countries are more politically influenced
c. Common law countries use less conservative financial reporting and have less information asymmetry
d. Code law countries use less conservative financial reporting and have less information asymmetry
d. Code law countries use less conservative financial reporting and have less information asymmetry
What are the criteria for standard setting
a. Decision usefulness
b. Reduction of information asymmetry
c. Economic consequences of New standard
d. Consensus
e. All of the above
e. All of the above
3. What are some of the ways the Accounting Bodies communicate the new standards that are being formed?
a. Exposure Drafts
b. Discussion Papers
c. Public board meeting and meeting transcripts
d. All of the Above
d. All of the Above
According to article 2, did firms lobby in self-interest or capture the effects of signalling?
Signalling
What is not a reason that accounting standards may differ across countries?
a. Governments
b. Language
c. Culture
d. Past practice
b. Language
Increased integration creates better working capital markets which can contribute to social welfare due to:
a. Greater comparability, lower capital costs, and reduced information asymmetry
b. Increased market liquidity, greater comparability, lower capital costs, and more efficient contracting across the integrated markets.
c. Efficient contracting, reduced information asymmetry and higher quality financial reporting
d. Efficient contracting, higher quality financial reporting, higher capital costs and increased investment
b. Increased market liquidity, greater comparability, lower capital costs, and more efficient contracting across the integrated markets.
Individuals or organizations, usually formally organized, that, on the basis of one or more shared concerns, attempts to influence public policy in its favour. This is:
a. Capture Theory
b. Power Theory
c. Public Interest Theory
d. Interest Group Theory
d. Interest Group Theory
2. The factors that contribute to predisposition of regulatory bodies to take actions consistent with the preferences of the industry they were intended to regulate relates to which of the following theory:
a. Capture Theory
b. Power Theory
c. Public Interest Theory
d. Interest Group Theory
a. Capture Theory
What is the Corridor Method?
The corridor method permits an entity to defer a portion of actuarial gains and losses that fall outside a specified corridor (being the greater of 10% of the defined benefit obligation (DBO) or 10% of the fair value of plan assets
What would be an advantage of having all countries adopt and follow the same
accounting standards?
a. Agreement.
b. Comparability.
c. Lower preparation costs.
d. Comparability and lower preparation costs.
d. Comparability and lower preparation costs.
According to the 2002 Norwalk agreement, commonalities that were agreed upon include:
a. Goodwill elimination revisions in favour of impairment testing, ESO expensing, fair value measurements
b. Goodwill elimination revisions in favour of impairment testing, ESO expensing, LIFO inventory method
c. ESO expensing, LIFO inventory method, OCI after net income in SCI
d. ESO expensing, Upward revaluation of PPE, Capitalization of R&D costs
e. None of the above
a. Goodwill elimination revisions in favour of impairment testing, ESO expensing, fair value measurements
SEC regulation FD covers:
a. notification to customers of a member firm's privacy policies and practices
b. selective disclosure of material non-public information by issuers
c. standardization of disclosure of financial and non-financial information by issuers
d. registration filings with the SEC by small business issuers
b. selective disclosure of material non-public information by issuers