Question 1

IFRS tends to be simpler and more flexible in the accounting and disclosure requirements than U.S. GAAP.

Accepted Answer

A) True 
 B)False  True

Question 2

Capital markets are increasingly integrated and companies have greater flexibility in deciding where to raise capital.

Accepted Answer

A) True 
 B)False  True

Question 3

Which of the following is not one of the major types of pronouncements issued by the International Accounting Standards Board (IASB) ?

Accepted Answer

A)   International financial reporting standard.
B)   Memorandum of understanding.
C)   Framework for financial reporting.
D)   International financial reporting interpretations.

Question 4

The information provided by financial reporting pertains to

Accepted Answer

A)   individual business enterprises, rather than to industries or an economy as a whole or to members of society as consumers.
B)   business industries, rather than to individual enterprises or an economy as a whole or to members of society as consumers.
C)   individual business enterprises, industries, and an economy as a whole, rather than to members of society as consumers.
D)   an economy as a whole and to members of society as consumers, rather than to individual enterprises or industries.

Question 5

What is a possible danger if politics plays too big a role in developing IFRS?

Accepted Answer

A)   Financial reporting standards that are issued that are not truly generally accepted.
B)   Individuals may influence the standards.
C)   User groups become active.
D)   The IASB delegates its authority to elected officials.

Question 6

Which of the following has the highest authoritative support?

Accepted Answer

A)   International Financial Reporting Standards.
B)   International Accounting Standards.
C)   Interpretations of the IFRIC.
D)   Framework for Financial Reporting.

Question 7

The major financial statements include all of the following except:

Accepted Answer

A)   Statement of financial position.
B)   Statement of changes in financial position.
C)   Statement of comprehensive income.
D)   Statement of changes in equity. B

Question 8

Which of the following is an ethical concern of accountants?

Accepted Answer

A)   Earnings manipulation.
B)   Conservative accounting.
C)   Industry practices.
D)   None of the above.

Question 9

The expectations gap is caused by what the public thinks accountants should be doing and what accountants think they can do.

Accepted Answer

A) True 
 B)False

Question 10

The standard-setting structure used by the International Accounting Standards Board is very similar to that used by the Financial Accounting Standards Board.

Accepted Answer

A) True 
 B)False

Question 11

Ethical issues in financial accounting are governed by the AICPA.

Accepted Answer

A) True 
 B)False

Question 12

Which of these statements regarding the IFRS and U.S. GAAP is correct?

Accepted Answer

A)   U.S. GAAP is considered to be "principles-based" and more detailed than IFRS.
B)   U.S. GAAP is considered to be "rules-based" and less detailed than IFRS.
C)   IFRS is considered to be "principles-based" and less detailed than U.S. GAAP
D)   Both U.S. GAAP and IFRS are considered to be "rules-based", but U.S. GAAP tends to be more complex.

Question 13

The International Organization of Securities Commissions (IOSCO) sets accounting standards for those countries which have not yet adopted IFRS.

Accepted Answer

A) True 
 B)False

Question 14

What is due process in the context of standard setting at the IASB?

Accepted Answer

A)   IASB operates in full view of the public.
B)   Public hearings are held on proposed accounting standards.
C)   Interested parties can make their views known.
D)   All of these answers are correct.

Question 15

Which of the following is true with regard to the characteristics of the International Accounting Standards Board (IASB) ?

Accepted Answer

A)   A unanimous vote by all Board members is needed to issue a new International Financial Reporting Standard (IFRS) .
B)   The IASB consists of 13 part-time members.
C)   Each member of the IASB must come from a different country.
D)   IASB members are appointed for 5-year renewable terms.

Question 16

Significant financial reporting issues facing global financial reporting and efficient capital allocation include all of the following except:

Accepted Answer

A)   How to provide backward-looking information.
B)   How to report nonfinancial measures such as customer satisfaction.
C)   How to provide forward-looking information.
D)   How to provide real-time financial statement information.

Question 17

The standards issued by various standard-setting organizations around the world include standards that are profit-oriented and investor-focused.

Accepted Answer

A) True 
 B)False

Question 18

The passage of a new International Financial Reporting Standards Statement requires the support of ten of the thirteen board members.

Accepted Answer

A) True 
 B)False

Question 19

IFRS is considered more comprehensive than U.S. GAAP and the standards contain more implementation guidance than U.S. GAAP.

Accepted Answer

A) True 
 B)False

Question 20

Politics and political pressure in establishing IFRS is a negative force.

Accepted Answer

A) True 
 B)False

Exam 1: Financial Reporting and Accounting Standards

IFRS tends to be simpler and more flexible in the accounting and disclosure requirements than U.S. GAAP.

Correct AnswerverifiedTrue

Capital markets are increasingly integrated and companies have greater flexibility in deciding where to raise capital.

Correct AnswerverifiedTrue

Which of the following is not one of the major types of pronouncements issued by the International Accounting Standards Board (IASB) ?

Correct AnswerverifiedShow Answer

The information provided by financial reporting pertains to

Correct AnswerverifiedShow Answer

What is a possible danger if politics plays too big a role in developing IFRS?

Correct AnswerverifiedShow Answer

Which of the following has the highest authoritative support?

Correct AnswerverifiedShow Answer

The major financial statements include all of the following except:

Correct AnswerverifiedB

Which of the following is an ethical concern of accountants?

Correct AnswerverifiedShow Answer

The expectations gap is caused by what the public thinks accountants should be doing and what accountants think they can do.

Correct AnswerverifiedShow Answer

The standard-setting structure used by the International Accounting Standards Board is very similar to that used by the Financial Accounting Standards Board.

Correct AnswerverifiedShow Answer

Ethical issues in financial accounting are governed by the AICPA.

Correct AnswerverifiedShow Answer

Which of these statements regarding the IFRS and U.S. GAAP is correct?

Correct AnswerverifiedShow Answer

The International Organization of Securities Commissions (IOSCO) sets accounting standards for those countries which have not yet adopted IFRS.

Correct AnswerverifiedShow Answer

What is due process in the context of standard setting at the IASB?

Correct AnswerverifiedShow Answer

Which of the following is true with regard to the characteristics of the International Accounting Standards Board (IASB) ?

Correct AnswerverifiedShow Answer

Significant financial reporting issues facing global financial reporting and efficient capital allocation include all of the following except:

Correct AnswerverifiedShow Answer

The standards issued by various standard-setting organizations around the world include standards that are profit-oriented and investor-focused.

Correct AnswerverifiedShow Answer

The passage of a new International Financial Reporting Standards Statement requires the support of ten of the thirteen board members.

Correct AnswerverifiedShow Answer

IFRS is considered more comprehensive than U.S. GAAP and the standards contain more implementation guidance than U.S. GAAP.

Correct AnswerverifiedShow Answer

Politics and political pressure in establishing IFRS is a negative force.

Correct AnswerverifiedShow Answer

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