Question 1

A distinguishing characteristic(s) of corporate governance in China is the importance of:

Accepted Answer

A) State investors in Chinese entities 
B) Family ownership of Chinese entities 
C) Blockholders of Chinese entities 
D) All of the above 
A) State investors in Chinese entities 
B) Family ownership of Chinese entities 
C) Blockholders of Chinese entities 
D) All of the above A

Question 2

Lease standards in the U.S.can be manipulated to achieve the desired goal of:

Accepted Answer

A) Capitalizing lease payments at their present values to record an asset instead of an expense 
B) Capitalizing lease payments at their present values to record an expense instead of an asset 
C) Emphasizing form over substance 
D) All of the above 
A) Capitalizing lease payments at their present values to record an asset instead of an expense 
B) Capitalizing lease payments at their present values to record an expense instead of an asset 
C) Emphasizing form over substance 
D) All of the above D

Question 3

From a U.S.perspective, are there any concerns that regulators and standard setters should have about moving towards the adoption of IFRS in the U.S.? Why are they concerns?

Accepted Answer

There are several concerns that regulators and standard setters in the U.S. should have about moving towards the adoption of IFRS. One concern is the potential impact on comparability and consistency of financial reporting. IFRS and U.S. GAAP have significant differences in accounting principles and practices, and a move towards IFRS could lead to challenges in comparing financial statements across different companies and industries.

Another concern is the potential cost and complexity of transitioning to IFRS. Companies would need to invest significant resources in training, systems upgrades, and compliance efforts to ensure a smooth transition to IFRS. This could be particularly burdensome for smaller companies with limited resources.

Additionally, there are concerns about the potential loss of influence and control over accounting standards. Currently, the U.S. Financial Accounting Standards Board (FASB) has significant influence over the development of accounting standards, but a move towards IFRS could diminish this influence and cede control to international standard setters.

There are also concerns about the impact on regulatory oversight and enforcement. The Securities and Exchange Commission (SEC) plays a critical role in overseeing financial reporting in the U.S., and a move towards IFRS could require significant changes to the regulatory framework and enforcement mechanisms.

Overall, while there are potential benefits to adopting IFRS, such as improved comparability and consistency in financial reporting, there are also significant concerns that regulators and standard setters in the U.S. should carefully consider before making any decisions about adoption.

Question 4

A member body of the International Federation of Accountants (IFAC) should follow the provisions in the Code of Ethics for Professional Accountants (IFAC Code) when each of the following exists except for:

Accepted Answer

A) A member body of IFAC applies less stringent standards than those stated in the IFAC Code 
B) The member body is prohibited by law or regulation from complying with certain parts of the Code and complies with all other parts of the code 
C) The member body is prohibited by law or regulation from complying with certain parts of the Code and does not comply with all other parts of the code 
D) All of the above 
A) A member body of IFAC applies less stringent standards than those stated in the IFAC Code 
B) The member body is prohibited by law or regulation from complying with certain parts of the Code and complies with all other parts of the code 
C) The member body is prohibited by law or regulation from complying with certain parts of the Code and does not comply with all other parts of the code 
D) All of the above

Question 5

Compare and contrast corporate governance provisions in the U.S.with those in Germany? Where differences exist, evaluate whether you think the U.S.system is preferable or the German system.

Accepted Answer

Corporate governance provisions in the U

Question 6

A "secret" or "hidden" reserve can occur when a company does one or more of the following except for:

Accepted Answer

A) Fails to recognize an asset in its balance sheet 
B) Deliberately measures an asset at an unreasonably low value 
C) Sets up unnecessarily high provisions 
D) Sets up unnecessarily low provisions 
A) Fails to recognize an asset in its balance sheet 
B) Deliberately measures an asset at an unreasonably low value 
C) Sets up unnecessarily high provisions 
D) Sets up unnecessarily low provisions

Question 7

Each of the following can be a motivation to record a secret reserve except for:

Accepted Answer

A) Understate net assets and equity 
B) Overstate net assets and equity 
C) Record amounts in the name of prudence 
D) Record amounts to get tax deductions 
A) Understate net assets and equity 
B) Overstate net assets and equity 
C) Record amounts in the name of prudence 
D) Record amounts to get tax deductions

Question 8

Consider the discussion in the chapter about establishing one set of accounting standards and comment on whether you think there should be one set of educational standards for accounting students at educational institutions in countries that comply with IFRS.Should there be a uniform CPA (Chartered Accountants) Exam for all such students? Why or why not?

Accepted Answer

The discussion about establishing one se

Question 9

The Tata Group's code of ethics contains each of the following provisions except for:

Accepted Answer

A) Relatively minor gifts can be made if normal and customary 
B) Conflicts of interest should be avoided and, if they exist, they should be reported to the CEO 
C) The code prohibits the use of confidential information without the explicit approval of management 
D) Insider information can be used as long as it is approved by management 
A) Relatively minor gifts can be made if normal and customary 
B) Conflicts of interest should be avoided and, if they exist, they should be reported to the CEO 
C) The code prohibits the use of confidential information without the explicit approval of management 
D) Insider information can be used as long as it is approved by management

Question 10

The SEC roadmap refers to:

Accepted Answer

A) A map of the highways and freeways to take to drive from Texas to California. 
B) A series of steps to be taken by FASB to adopt IFRS in the U.S. 
C) A timetable for adoption of IFRS in the U.S. 
D) A series of steps to be taken by the SEC to adopt IFRS in the U.S. 
A) A map of the highways and freeways to take to drive from Texas to California. 
B) A series of steps to be taken by FASB to adopt IFRS in the U.S. 
C) A timetable for adoption of IFRS in the U.S. 
D) A series of steps to be taken by the SEC to adopt IFRS in the U.S.

Question 11

In some countries the laws and regulations play a much bigger role in establishing accounting and financial reporting standards than in the U.S.Discuss the difficulties that may arise on an international level in the process of developing IFRS given the varying influences of governments and regulators in the national standard setting process.

Accepted Answer

The varying influences of governments an

Question 12

IFRS tends to be more ____________ than U.S.GAAP.

Accepted Answer

A) rules-based 
B) principles based 
C) consistent 
D) accurate 
A) rules-based 
B) principles based 
C) consistent 
D) accurate

Question 13

Given that IFRS is not currently required in the U.S., foreign companies that list their stock on the New York Stock Exchange must:

Accepted Answer

A) Reconcile the financial statements in their home country GAAP to U.S.GAAP 
B) Use IFRS in their financial statements 
C) Either reconcile their statements to U.S.GAAP or use IFRS 
D) Use their home country GAAP in their financial statements listed on the NYSE 
A) Reconcile the financial statements in their home country GAAP to U.S.GAAP 
B) Use IFRS in their financial statements 
C) Either reconcile their statements to U.S.GAAP or use IFRS 
D) Use their home country GAAP in their financial statements listed on the NYSE

Question 14

One feature of corporate governance in Germany that makes it stand out when compared to the U.S.is:

Accepted Answer

A) A separate audit committee and a board of directors 
B) A unitary board of directors system 
C) A dual board of directors system 
D) Compliance with the Sarbanes-Oxley Act 
A) A separate audit committee and a board of directors 
B) A unitary board of directors system 
C) A dual board of directors system 
D) Compliance with the Sarbanes-Oxley Act

Question 15

The rules under IFRS for property, plant, and equipment differ from U.S.GAAP because:

Accepted Answer

A) U.S.GAAP allows for the revaluation of property, plant, and equipment 
B) IFRS allows for the revaluation of property, plant, and equipment 
C) U.S.GAAP permits the LIFO method of valuation 
D) IFRS prohibits accelerated methods of depreciation 
A) U.S.GAAP allows for the revaluation of property, plant, and equipment 
B) IFRS allows for the revaluation of property, plant, and equipment 
C) U.S.GAAP permits the LIFO method of valuation 
D) IFRS prohibits accelerated methods of depreciation

Question 16

The relatively more principles-based IFRS standards requires each of the following except for:

Accepted Answer

A) Professional judgment based on the substance over form concept 
B) Professional judgment in applying the true and fair view override 
C) Professional judgment at both the transaction and financial statement levels 
D) Professional judgment in applying the present fairly concept 
A) Professional judgment based on the substance over form concept 
B) Professional judgment in applying the true and fair view override 
C) Professional judgment at both the transaction and financial statement levels 
D) Professional judgment in applying the present fairly concept

Question 17

The Bat-A-Bing case deals with which of the following accounting issues.

Accepted Answer

A) Proved reserves 
B) Unapproved claims 
C) Contractual allowances 
D) Franchise revenue
Essay Questions 
A) Proved reserves 
B) Unapproved claims 
C) Contractual allowances 
D) Franchise revenue
Essay Questions

Question 18

The case that deals with conflicts between management and the board of directors and the role of family members in various business entities is:

Accepted Answer

A) Parmalat 
B) Satyam 
C) Bat-A-Bing Construction 
D) Enron 
A) Parmalat 
B) Satyam 
C) Bat-A-Bing Construction 
D) Enron

Question 19

The comply or explain principle refers to:

Accepted Answer

A) Certification of financial statements by CEOs and CFOs 
B) Explain any gaps between existing corporate governance practices and recommendations by authoritative bodies/pronouncements 
C) Explain any gaps between existing corporate governance practices and IFRS requirements 
D) Certification of corporate governance practices by CEOS and CFOs 
A) Certification of financial statements by CEOs and CFOs 
B) Explain any gaps between existing corporate governance practices and recommendations by authoritative bodies/pronouncements 
C) Explain any gaps between existing corporate governance practices and IFRS requirements 
D) Certification of corporate governance practices by CEOS and CFOs

Question 20

In China and India different ownership groups often play a role much more important than these groups play in the U.S.Describe the different ownership patterns in China and India.Why do you think these groups have a larger role to play? Are there any concerns about the fact that they play such a larger role?

Accepted Answer

In China, the ownership patterns are hea

A distinguishing characteristic(s) of corporate governance in China is the importance of:

Lease standards in the U.S.can be manipulated to achieve the desired goal of:

From a U.S.perspective, are there any concerns that regulators and standard setters should have about moving towards the adoption of IFRS in the U.S.? Why are they concerns?

A member body of the International Federation of Accountants (IFAC) should follow the provisions in the Code of Ethics for Professional Accountants (IFAC Code) when each of the following exists except for:

Compare and contrast corporate governance provisions in the U.S.with those in Germany? Where differences exist, evaluate whether you think the U.S.system is preferable or the German system.

A "secret" or "hidden" reserve can occur when a company does one or more of the following except for:

Each of the following can be a motivation to record a secret reserve except for:

The Tata Group's code of ethics contains each of the following provisions except for:

The SEC roadmap refers to:

IFRS tends to be more ____________ than U.S.GAAP.

Given that IFRS is not currently required in the U.S., foreign companies that list their stock on the New York Stock Exchange must:

One feature of corporate governance in Germany that makes it stand out when compared to the U.S.is:

The rules under IFRS for property, plant, and equipment differ from U.S.GAAP because:

The relatively more principles-based IFRS standards requires each of the following except for:

The Bat-A-Bing case deals with which of the following accounting issues.

The case that deals with conflicts between management and the board of directors and the role of family members in various business entities is:

The comply or explain principle refers to:

Ethical Reasoning Implications for Accounting

Accountants Ethical Decision Process and Professional Judgment

Corporate Governance and Ethical Management

Aicpa Code of Professional Conduct

Audit Responsibilities and Accounting Fraud

Legal and Regulatory Obligations in an Ethical Framework

Earnings Management and the Quality of Financial Reporting

Filters

Exam 8: International Financial Reporting: Ethics and Corporate Governance Considerations

A distinguishing characteristic(s) of corporate governance in China is the importance of:

Lease standards in the U.S.can be manipulated to achieve the desired goal of:

From a U.S.perspective, are there any concerns that regulators and standard setters should have about moving towards the adoption of IFRS in the U.S.? Why are they concerns?

A member body of the International Federation of Accountants (IFAC) should follow the provisions in the Code of Ethics for Professional Accountants (IFAC Code) when each of the following exists except for:

Compare and contrast corporate governance provisions in the U.S.with those in Germany? Where differences exist, evaluate whether you think the U.S.system is preferable or the German system.

A "secret" or "hidden" reserve can occur when a company does one or more of the following except for:

Each of the following can be a motivation to record a secret reserve except for:

The Tata Group's code of ethics contains each of the following provisions except for:

The SEC roadmap refers to:

IFRS tends to be more ____________ than U.S.GAAP.

Given that IFRS is not currently required in the U.S., foreign companies that list their stock on the New York Stock Exchange must:

One feature of corporate governance in Germany that makes it stand out when compared to the U.S.is:

The rules under IFRS for property, plant, and equipment differ from U.S.GAAP because:

The relatively more principles-based IFRS standards requires each of the following except for:

The Bat-A-Bing case deals with which of the following accounting issues.

The case that deals with conflicts between management and the board of directors and the role of family members in various business entities is:

The comply or explain principle refers to:

Ethical Reasoning Implications for Accounting

Accountants Ethical Decision Process and Professional Judgment

Corporate Governance and Ethical Management

Aicpa Code of Professional Conduct

Audit Responsibilities and Accounting Fraud

Legal and Regulatory Obligations in an Ethical Framework

Earnings Management and the Quality of Financial Reporting

Filters