ACCT 5312 - Final Review

What requirements did the Dodd-Frank Act impose on companies? Multiple select question. A. All board compensation committees must be comprised solely of independent directors. B. Companies must disclose why they have chosen to have either the same person or separate people serve as the CEO and board chair. C. Companies must have periodic shareholder advisory votes on executive compensation (the so-called "say on pay" mandate). D. Companies must disclose in their annual 10-K reports any "Changes in and Disagreements with Accountants on Accounting and Financial Disclosure."

A, B & C A. All board compensation committees must be comprised solely of independent directors. B. Companies must disclose why they have chosen to have either the same person or separate people serve as the CEO and board chair. C. Companies must have periodic shareholder advisory votes on executive compensation (the so-called "say on pay" mandate).

The Sarbanes-Oxley (SOX) Act of 2002 prohibited accounting firms from performing certain specific nonaudit services to their audit clients, including: Multiple select question. A. "expert" services B. tax compliance and advisory services C. financial information systems design and implementation D. internal auditing services

A, C & D A. "expert" services C. financial information systems design and implementation D. internal auditing services

Some of the significant policies that are frequently described in the notes to the financial statements of publicly traded companies include details concerning: Multiple select question. A. inventory valuation methods. B. goodwill and acquisition-related intangibles. C. stock option and stock purchase plans. D. product warranties. E. income taxes.

A, B, C & E A. inventory valuation methods. B. goodwill and acquisition-related intangibles. C. stock option and stock purchase plans. E. income taxes.

In which situations could an auditor issue a qualified opinion on a company's financial statements? Multiple select question. A. When there is a material deviation from generally accepted accounting principles that affects only a part of the financial statements B. When the financial statements are presented fairly in all material respects and are in conformity with the generally accepted accounting principles C. When the scope of the audit is restricted, preventing the auditor from performing an essential audit work D. When the financial statements are misrepresented, misstated, and do not present fairly in all material respects the financial position and results of operations

A & C A. When there is a material deviation from generally accepted accounting principles that affects only a part of the financial statements C. When the scope of the audit is restricted, preventing the auditor from performing an essential audit work

Net income attributable to noncontrolling interest: Multiple select question. A. is normally subtracted from net income to arrive at net income attributable to the parent company. B. is presented for subsidiaries but is not included in the parent company's financial statements. C. must be clearly identified and presented on the face of the income statement. D. must be presented on a per share basis and disclosed in the notes.

A & C A. is normally subtracted from net income to arrive at net income attributable to the parent company. C. must be clearly identified and presented on the face of the income statement.

What key interpretations are typically made from the statement of cash flows? More than one answer may be correct. Multiple select question. A. Whether net cash flows provided by operations exceed the company's cash used for investing activities B. How operating, investing, and financing activities affected the company's cash balance during the year C. How much cash was generated by the depreciation process during the year D. Whether the company's cash balance increased or decreased during the year

A & D A. Whether net cash flows provided by operations exceed the company's cash used for investing activities D. Whether the company's cash balance increased or decreased during the year

What are some of the key requirements that the Dodd-Frank Act imposed on businesses? Multiple select question. A. To disclose the reasons a company has chosen to have either the same person or separate people serve as the CEO and board chair B. That executive compensation and golden parachute provisions must have periodic shareholder advisory votes C. That the SEC implement rules to permit shareholders to use management's proxy materials for the purpose of nominating their own directors D. To have clawback policies in place to recoup executive compensation in the event of financial reporting restatements

A, B & D A. To disclose the reasons a company has chosen to have either the same person or separate people serve as the CEO and board chair B. That executive compensation and golden parachute provisions must have periodic shareholder advisory votes D. To have clawback policies in place to recoup executive compensation in the event of financial reporting restatements

Some of the key interpretations to be made from the statement of cash flows include the determination of: Multiple select question. A. whether net cash flows provided by operations are sufficient to pay adequate dividends to the company's shareholders. B. whether the relative totals of operating, investing, and financing cash flows were similar to those observed in the prior year. C. how significantly the interest receivable and wages payable account balances changed during the year. D. whether the company has generated positive net cash flows from operations.

A, B & D A. whether net cash flows provided by operations are sufficient to pay adequate dividends to the company's shareholders. B. whether the relative totals of operating, investing, and financing cash flows were similar to those observed in the prior year. D. whether the company has generated positive net cash flows from operations.

Identify the section of an annual report where the reporting entity discloses the non-GAAP financial measures and key performance indicators used to assess the entity's financial and operating results. A. Management's discussion and analysis B. Management's statement of responsibility C. Notes to financial statements D. Letters of management

A. Management's discussion and analysis

In which situations could an auditor issue a qualified opinion on a company's financial statements? Multiple select question. A. When the financial statements are misrepresented, misstated, and do not present fairly in all material respects the financial position and results of operations B. When the scope of the audit is restricted, preventing the auditor from performing an essential audit work C. When there is a material deviation from generally accepted accounting principles that affects only a part of the financial statements D. When the financial statements are presented fairly in all material respects and are in conformity with the generally accepted accounting principles

B & C B. When the scope of the audit is restricted, preventing the auditor from performing an essential audit work C. When there is a material deviation from generally accepted accounting principles that affects only a part of the financial statements

Under the current accounting standard, how are extraordinary items to be reported? A. On the face of the balance sheet B. Only in the notes to accounts C. As a component of paid-in capital D. As a separate component of income from continuing operations

D. As a separate component of income from continuing operations

Advertising expenditures and research and development (R&D) costs are recorded as expenses in the period incurred under U.S. GAAP. What concepts justify this approach? A. Going concern and full disclosure B. Consistency and materiality C. Full disclosure and conservatism D. Objectivity and conservatism

D. Objectivity and conservatism