chapter 3 smartbook
The Framework acknowledges that several different measurement bases may be used to measure assets. These bases include all of the following, except Blank______. Multiple choice question. historical cost future value realizable value current cost present value
future value
refers to the reduction of alternative accounting practices in different countries?
harmonization
The FASB's mission is to improve U.S. financial accounting standards for the benefit of present and ______ ,investors, lenders, donors, and other creditors.
potential or future
The objective of the Framework for the Preparation and Presentation of Financial Statements deals with all of the followings, except the Blank______. Multiple choice question. quantity of the items included in the financial statements concepts of capital and capital maintenance objective of financial statements and underlying assumptions qualitative characteristics that affect the usefulness of financial statements
quantity of the items included in the financial statements
When did the Trustees vote to revise the constitution for changes resulting from the first phase of the review, including formation of the Monitoring Board? Multiple choice question. July 2011 January 2009 December 2012 June 2010
January 2009
When did the European Union issue a directive requiring all listed companies of member states to prepare consolidated financial statement? Multiple choice question. December 2000 December 2010 January 2011 July 2002
July 2002
Support for a principles-based approach has come from both current and former U.S. .
Regulators
The European Union issued two directives aimed at harmonizing accounting. Which directive deals with valuation rules, disclosure requirements, and the format of the financial statements? Multiple choice question. The Seventh Directive The Third Directive The Fourth Directive The First Directive
The Fourth Directive
What is the independent foundation that the IASB is organized under called? Multiple choice question. The International Accounting Profession The CMA Foundation The IFRS Foundation The Accounting Team
The IFRS Foundation
The objectives of the IFRS Advisory Council include Blank______. Multiple choice question. approving and overseeing Trustees and informing the IASB of the views of the Council members on its major standard-setting projects selecting the priorities on behalf of the IASB converging different accounting standards advising the IASB on its priorities and informing the IASB of the views of the Council members on its major standard-setting projects
advising the IASB on its priorities and informing the IASB of the views of the Council members on its major standard-setting projects
The International Organization of Securities and Commissions (IOSCO) provides assistance to ensure the integrity of the markets by Blank______. Multiple choice question. an application of the standards but not by effective enforcement effective enforcement but not by an application of the standards revising the standards an application of the standards and by effective enforcement
an application of the standards and by effective enforcement
In 1990, EU decided to stop making directives and to...
associate with the IASC
What are the two ways of accounting harmonization? Multiple choice question. (1) Harmonization of accounting practices and (2) de facto harmonization (1) Harmonization of accounting regulations or standards and (2) de jure harmonization (1) Harmonization of accounting regulations or standards and (2) harmonization of accounting practices
(1) Harmonization of accounting regulations or standards and (2) harmonization of accounting practices
3 approaches to convergence
1. Merge all standard-setting bodies into one unified global body2. Recognize each of the existing standard bodies as the sole authority of their respective jurisdiction3. Recognize that a national standard-setting body can coexist with an international coordinating body
How many years did the initial phase of the IASC's harmonization efforts cover? Multiple choice question. 12 10 15 5
15
The International Accounting Standards Committee (IASC) was established in the year of Blank______. Multiple choice question. 1973 1976 1975 1974
1973
The International Accounting Standards Committee (IASC) was established in the year of Blank______. Multiple choice question. 1976 1975 1973 1974
1973
IASC's second phase covered which time period? Multiple choice question. 1989 to 1999 1989 to 1995 1985 to 1993 1989 to 1993
1989 to 1993
When was the International Accounting Standards Board (IASB) created? Multiple choice question. 1993 2001 1973 1989
2001
When did the IASB publish for public comment a discussion paper on fair value measurement in financial reports? Multiple choice question. 2000 2002 2006 2004
2006
Since when did the Form 20-F filed by foreign issuers using IFRS with the SEC no longer include a reconciliation to U.S. GAAP? Multiple choice question. 2009 2016 2000 2007
2007
When did the FASB issue the SFAS No. 159, the Fair Value Option for Financial Assets and Financial Liabilities? Multiple choice question. 2003 2001 2005 2007
2007
How many trustees does the IFRS Foundation consist of? 24 20 21 22
22
How many generic International Accounting Standards (IAS) did the IASC issue in the initial phase? Multiple choice question. 20 15 26 10
26
How many members of the International Accounting Standards Board are from North America? Multiple choice question. 3 5 2 4
4
How many International Accounting Standards (IAS) have been issued by the International Accounting Standards Committee (IASC)? Multiple choice question. 33 31 41 21
41
Which approach does the IASB use to develop accounting standards? Multiple choice question. A principles-based approach A rules-based approach A profit approach A market-oriented approach
A principles-based approach
In 1993-1994, standard-setters from the United Kingdom, the United States, Canada, and Australia began meeting quarterly to discuss issues related to international standard-setting. The group became to be known as the G4+1. What did the 1 refer to? Multiple choice question. China A representative, usually the secretary-general of the IASC, who attended as an observer Another country randomly selected annually, who attended as an observer Japan
A representative, usually the secretary-general of the IASC, who attended as an observer
What was the ultimate goal of convergence of the FASB and IFRS? Multiple choice question. Two separate sets of high-quality, international accounting standards, one for domestic and the other for cross-border financial reporting A single set of high-quality, international accounting standards used worldwide for cross-border financial reporting Two separate sets of high-quality, international accounting standards used for both domestic and cross-border financial reporting A single set of high-quality, international accounting standards used worldwide for both domestic and cross-border financial reporting
A single set of high-quality, international accounting standards used worldwide for both domestic and cross-border financial reporting
Which international organization has NOT contributed to the harmonization efforts at the global level? Multiple choice question. The International Organization of Securities Commissions (IOSCO) The International Forum of Accountancy Development (IFAD) The International Federation of Accountants (IFAC) All of the three international organizations (IOSCO, IFAC, IFAD) have contributed.
All of the three international organizations (IOSCO, IFAC, IFAD) have contributed.
With regard to the composition of the trustees, what does the constitution require? Multiple choice question. At least 80% of the trustees must have CMA At least 75% of the trustees must be auditors At least 10 years working experience An appropriate balance of professional backgrounds
An appropriate balance of professional backgrounds
The IASC was established by an agreement of the leading professional accounting bodies in the following 10 countries: Blank______. Multiple choice question. Austria, Canada, France, Germany, Ireland, Japan, Mexico, the Netherlands, the United Kingdom, and the United States Australia, Canada, France, Germany, Ireland, China, Mexico, the Netherlands, the United Kingdom, and the United States Australia, Canada, France, Germany, Italy, Japan, Mexico, the Netherlands, the United Kingdom, and the United States Australia, Canada, France, Germany, Ireland, Japan, Mexico, the Netherlands, the United Kingdom, and the United States
Australia, Canada, France, Germany, Ireland, Japan, Mexico, the Netherlands, the United Kingdom, and the United States
Initially, which country or countries among the 14 countries represented on IOSCO's Technical Committee did not allow foreign companies to use IAS without reconciliation to local GAAP for listing purposes? Multiple choice question. All 14 countries represented on IOSCO's Technical Committee Canada and the United States Only Canada Only the United States
Canada and the United States
Two most important players in harmonization efforts:
EU and the IASC
In the year 1989, the IASC had a publication that set out the objectives of financial statements, the qualitative characteristics of financial information, definitions of the elements of financial statements, and the criteria for recognition of financial statement elements. Which publication was that? Multiple choice question. Framework for the Presentation of Financial Restatements Framework for the Preparation and Presentation of Financial Statements Framework for the Preparation of Auditing Reports Framework for the Preparation of Tax Filings
Framework for the Preparation and Presentation of Financial Statements
Which IFRS provides guidelines for First-time adoption of IFRS? Multiple choice question. IFRS 1 IFRS 4 IFRS 2 IFRS 17
IFRS 1
The major concerns in achieving IFRS convergence include Blank______. Multiple choice question. the experience of the members the IFRS Foundation raising funds the absence of a monitoring board IFRS language translation difficulties
IFRS language translation difficulties
The international organization that aims to ensure a better regulation of the market on both the domestic and international levels, and provides assistance to ensure the integrity of the markets is the Blank______. Multiple choice question. IOSCO INTERPOL CPA IAS
IOSCO
Which of the following does NOT show U.S. support for a principles-based approach? Multiple choice question. In Puerto Rico in February 2002, the SEC chairman expressed preference for a principles-based set of accounting standards. In Germany in February 2002, the SEC chairman expressed preference for a principles-based set of accounting standards. A former SEC chairman referred to the IASB's approach as a "Ten Commandments" approach. The U.S. regulators were urged to move to principles-based standard
In Germany in February 2002, the SEC chairman expressed preference for a principles-based set of accounting standards.
How long did the process of restructuring the IASC into IASB take? Multiple choice question. Over 5 years Less than 1 year Between 1 year and 2 years Between 2 years and 4 years
Over 5 years
The European Union issued two directives aimed at harmonizing accounting. Which directive requires companies to prepare consolidated financial statements and outlines procedures for their preparation? Multiple choice question. The Fourth Directive Both the Fourth Directive and the Seventh Directive The Seventh Directive No directive requires companies to prepare consolidated financial statements and outlines procedures for their preparation.
The Seventh Directive
What is the primary objective of IFRS-based financial statements? Multiple choice question. To improve job security for employees of public companies To provide information useful for decision making To increase equity-based compensation for managers To eliminate financial restatements
To provide information useful for decision making
What is the primary objective of IFRS-based financial statements? Multiple choice question. To increase equity-based compensation for managers To provide information useful for decision making To eliminate financial restatements To improve job security for employees of public companies
To provide information useful for decision making
"Harmonization of accounting regulations or standards is also known as formal or _____ harmonization, and harmonization of accounting practices is also known as material or ________ , Correct Unavailable harmonization.
de jure, de facto
The primary objective of IFRS-based financial statements is to provide information useful for
decision makers
The principal responsibilities of the IASB include Blank______. Multiple choice question. developing and issuing International Financial Reporting Standards and Exposure Drafts and approving Interpretations approving Interpretations developing and issuing International Financial Reporting Standards and Exposure Drafts developing Interpretations
developing and issuing International Financial Reporting Standards and Exposure Drafts and approving Interpretations
EU directives led to...
differing profit measurements
Some politicians in the United States blamed IFRS for the recent financial crisis, particularly ____ , Correct Unavailable value accounting.
fair
The 2008 financial crisis affected the convergence process of U.S. GAAP and IFRS by initiating debates on how to report information about financial instruments, and the appropriateness of
fair values
True or false: International Accounting Standard (IAS) 11, Construction Contracts, as originally written in 1979, allowed companies to use ONLY the percentage-of-completion method in accounting for long-term construction contracts.
false
Different concepts of capital maintenance described by the Framework include Blank______. Multiple choice question. present and future values of capital maintenance private and public capital maintenance financial capital maintenance and government capital maintenance financial capital maintenance versus physical capital maintenance
financial capital maintenance versus physical capital maintenance
Complete the following statement: "Cross-listing of securities for companies would allow companies to gain access to Blank______ expensiv e capital in other countries." much more less more
less
Different concepts of capital maintenance lead to different bases for _____ assets.
measuring
what is the current status of convergence between the FASB and the IASB
nationalism
FASB and IASB will converge two sets of financial reporting standards
norwalk agreement
The Monitoring Board comprises of the relevant leaders of Blank______. Multiple choice question. the European Commissions, the Japanese Financial Services Agency, and the Emerging Markets Committee of IOSCO the European Commission, the Japanese Financial Services Agency, the U.S. Securities and Exchange Commission, the Emerging Markets Committee of IOSCO, and the Technical Committee of IOSCO the European Commissions, the Japanese Financial Services Agency, and the U.S. Securities and Exchange Commission the Japanese Financial Services Agency, the U.S. Securities and Exchange Commission, and the Emerging Market Committee of IOSCO
the European Commission, the Japanese Financial Services Agency, the U.S. Securities and Exchange Commission, the Emerging Markets Committee of IOSCO, and the Technical Committee of IOSCO
The European Union iThe European Union issued two directives aimed at harmonizing accounting. These two directives
the Fourth Directive and the Seventh Directive
The major concerns in achieving IFRS convergence include all of the following, except Blank______. the complication of particular standards insufficient guidance on first-time application of IFRS disagreement with certain significant IFRS the absence of the IFRS Interpretations Committee
the absence of the IFRS Interpretations Committee
The major concerns in achieving IFRS convergence include all of the following, except Blank______. Multiple choice question. insufficient guidance on first-time application of IFRS disagreement with certain significant IFRS the absence of the IFRS Interpretations Committee the complication of particular standards
the absence of the IFRS Interpretations Committee
The major concerns in achieving IFRS convergence include all of the following, except Blank______. Multiple choice question. the absence of the IFRS Interpretations Committee insufficient guidance on first-time application of IFRS the complication of particular standards disagreement with certain significant IFRS
the absence of the IFRS Interpretations Committee
The greatest obstacle to international convergence of financial reporting standards is Blank______. Multiple choice question. the location of IASB member countries the similarities in reporting standards the magnitude of the differences that exist between countries the fact that cross-listing firms gain access to less expensive capital in other countries
the magnitude of the differences that exist between countries
The 2008 financial crisis had an impact on the convergence process of U.S. GAAP and IFRS. One of the debates on such fundamental issues was how to report information about financial
transactions or instruments
True or false: Initially, the United States did not allow foreign companies to use IAS without reconciliation to local GAAP for listing purposes.
true
The four characteristics that make financial statement information useful are
understandability, relevance, reliability, and comparability.
As a result of the announcement of the AICPA made in 2008 to allow private companies to adopt IFRS ahead of public companies, U.S. based private companies that were subsidiaries of foreign companies using IFRS ______. Multiple choice question. were allowed to adopt IFRS in all public disclosures were allowed to adopt IFRS in their audited financial statements
were allowed to adopt IFRS in their audited financial statements
