Exam 1: Nature and Regulation of Companies

People cannot be appointed as members of the AASB unless:

The main functions of the Financial Reporting Council include: I. appointing members of the AASB and AUASB. II. determining the AASB's broad strategic direction. III. establishing appropriate consultative mechanisms. IV. directing the AASB in relation to the development or making of a particular standard. V. the power to veto a standard recommended by the AASB.

According to s. 224 of the ASIC Act 2001, accounting standards should result in financial information which has which of the following characteristics? I. Allows users to make and evaluate decisions about allocating scarce resources. II. Assists directors in discharging their obligations in relation to financial reporting. III. Is relevant to assessing performance, financial position, financing and investment. IV. Is readily understandable. V. Facilitates comparability. VI. Is relevant and reliable.

The certificate of registration issued by the Australian Securities and Investments Commission is valid:

The replaceable rules that apply to a company have effect as a contract between:

The role of the Australian Securities and Investments Commission is to: I. enforce and administer the Corporations Act. II. make information about companies and other bodies available to the public as soon as practicable. III. issue accounting standards for reporting entities. IV. maintain, facilitate and improve the performance of the financial system and entities in it.

All company registers must be kept at the registered office of the company.

The functions of the Australian Accounting Standards Board include: I. development of a conceptual framework for the purpose of evaluating proposed accounting standards. II) making accounting standards for the purpose of the Corporations Act. III) participating in and contributing to the development of a single set of accounting standards for worldwide use.

The advantages of a company over a partnership and sole trader do not include which of the following?

As the Urgent Issues Group (UIG) is now defunct, the interpretations issued by it are no longer enforceable.

Costs incurred in promoting and setting up a company are considered to be capital in nature and cannot be paid from the company's assets.

A key role of the Australian Securities and Investments Commission (ASIC) is to ensure that all company financial statements lodged with it:

The main role of the trustee for debenture holders is to protect the interests of:

A disclosing entity includes:

Under the ASIC Act 2001 one of the key functions of the Australian Accounting Standards Board (AASB) is to participate in the development of a single set of accounting standards for worldwide use.

Small proprietary companies must prepare audited accounts if requested by ASIC.

In announcing that the AASB would adopt IASB accounting standards by 1 January 2005, the Financial Reporting Council (FRC) argued that a single set of high-quality accounting standards that are accepted in international capital markets would greatly help cross-border comparisons by investors.

The share capital of a company may consist of:

According to the Corporations Act 2001, a small proprietary company is one which satisfies at least two of the following tests: it must have consolidated revenue of less than $25 million, consolidated gross assets of less than $12.5 million and:

The three main user groups of general purpose financial reports (GPFRs) contained in the Framework for the Preparation and Presentation of Financial Statements (the Framework) include the management of the reporting entity.