Chapter 1

the FASB is funded primarily by which of the following? Private donations Sales of publication and Codification access Accounting support fees The U.S. Congress (via an approved budget)

Accounting support fees

It may not always be possible to research the accounting for proposed transactions. Research may be required at the time, or after, a transaction is executed if The transaction or event could not have been anticipated, such as issues arising from a fire or natural disaster The transaction was time-sensitive, and there was not sufficient lead time to research the accounting Communication broke down between the accounting team and the operations teams in the organization, and the accounting team was not made aware of the proposed transaction The preparer has limited resources and therefore only performs research for final transactions. All of the other answers are correct

All of the other answers are correct

Within which of the following environments is accounting research performed? U.S. public companies U.S. private companies Governmental entities International companies All other answers are correct

All other answers are correct

This type of accountant may perform accounting research before financial statements are issued in order to review that a company's financial statements are presented fairly in conformity with GAAP. Choose the best answer. Corporate accountant Auditor Regulator Investor

Auditor

Ideally, companies with sufficient resources will perform accounting research for a transaction at which time? At the time when, or after, a transaction occurs After financial statements are issued Before a transaction occurs All of the other answers are correct

Before a transaction occurs

This type of accountant, also referred to as a preparer of financial statements, may perform accounting research in conjunction with the preparation of financial statements. Choose the best answer. Corporate accountant Auditor Regulator Investor

Corporate Accountant

True or False: In your career, you will likely not perform accounting research until you reach the manager or senior manager level.

False

Which of the following is not a benefit of researching a proposed transaction? Researching a proposed transaction allows management to evaluate whether the expected financial statement impacts of the transaction are acceptable. Management can use this information to adjust forecasted earnings to reflect the expected impacts of the transaction. It allows investors to research a company's choice of accounting methods before the transaction is finalized. The accounting team can prepare timely documentation of the expected accounting position. The audit team can review the proposed accounting position before the transaction is recorded.

It allows investors to research a company's choice of accounting methods before the transaction is finalized.

_____ companies issue financial statements because they are required to do so by the SEC. _____ companies may issue financial statements as necessary to satisfy the requirements of their investors, lenders, and other stakeholders.

Public Private

An accountant in this role may perform accounting research in order to understand accounting positions of the companies or industries his/her agency oversees, and these individuals may send comment letters to the extent they question a given position. Corporate accountant Auditor Regulator Investor

Regulator

The _____ gave the SEC ___ authority to establish accounting standards

Securities Exchange Act of 1934 Statutory

What are the two key objectives, described in the chapter, for why technical accounting research is performed? To account for transactions or items in a manner that is appropriate based on authoritative guidance. To submit contemporaneous documentation to the SEC in response to comment letters. To determine the proper procedures to be performed during an audit. To create documentation describing the research performed and supporting the conclusion reached

To account for transactions or items in a manner that is appropriate based on authoritative guidance. AND To create documentation describing the research performed and supporting the conclusion reached.

True or False: The SEC views itself—first and foremost—as a law enforcement agency.

True

True or False: Within large firms' advisory practices, entire teams may be devoted to assisting clients with accounting policy judgments.

True