Question 1

Which of the following groups have been criticised for their failure to respond to exposure drafts?

Accepted Answer

A) Large Australian companies. 
B) Auditors. 
C) Academics. 
D) Analysts. 
A) Large Australian companies. 
B) Auditors. 
C) Academics. 
D) Analysts. C

Question 2

Which of the following is NOT an advantage of accounting regulation?

Accepted Answer

A) Reduced lobbying to produce favourable outcomes. 
B) Increased efficiency in allocating capital. 
C) Cheaper production of accounting disclosure. 
D) Increased public confidence. 
A) Reduced lobbying to produce favourable outcomes. 
B) Increased efficiency in allocating capital. 
C) Cheaper production of accounting disclosure. 
D) Increased public confidence. A

Question 3

Which of the following is a fundamental assumption of Bushfire theory?

Accepted Answer

A) People are not influenced by media when it comes to regulation. 
B) People are proactive when it comes to regulation. 
C) People are reactive when it comes to regulation. 
D) People are apathetic when it comes to regulations. 
A) People are not influenced by media when it comes to regulation. 
B) People are proactive when it comes to regulation. 
C) People are reactive when it comes to regulation. 
D) People are apathetic when it comes to regulations. C

Question 4

Disadvantage of principles-based standards is:

Accepted Answer

A) They supply broad guidelines. 
B) They allow mangers to select policies that may not reflect the substance of a transaction. 
C) They allow accountants to use professional judgement. 
D) All of the above. 
A) They supply broad guidelines. 
B) They allow mangers to select policies that may not reflect the substance of a transaction. 
C) They allow accountants to use professional judgement. 
D) All of the above.

Question 5

Which of the following have been blamed for the Global Financial Crisis?

Accepted Answer

A) Auditor-Client relationships. 
B) Corporate governance structures. 
C) Accounting standards. 
D) All of the above. 
A) Auditor-Client relationships. 
B) Corporate governance structures. 
C) Accounting standards. 
D) All of the above.

Question 6

Which if the following is an advantage of rules-based accounting standards?

Accepted Answer

A) Can cover most situations. 
B) Reduced complexity of standards. 
C) Reduced opportunities for earnings management through judgements. 
D) Improve representational faithfulness of financial statements. 
A) Can cover most situations. 
B) Reduced complexity of standards. 
C) Reduced opportunities for earnings management through judgements. 
D) Improve representational faithfulness of financial statements.

Question 7

Signalling Theory postulates that:

Accepted Answer

A) Regulation is largely unnecessary. 
B) Non-disclosing entities will do better in the market for finance. 
C) Regulation decreases the cost of capital. 
D) Financial reporting is a pointless activity. 
A) Regulation is largely unnecessary. 
B) Non-disclosing entities will do better in the market for finance. 
C) Regulation decreases the cost of capital. 
D) Financial reporting is a pointless activity.

Question 8

Which of the following is NOT a key element of regulation?

Accepted Answer

A) Regulation should be biased. 
B) An intention to intervene. 
C) A restriction on choice. 
D) The exercise of control. 
A) Regulation should be biased. 
B) An intention to intervene. 
C) A restriction on choice. 
D) The exercise of control.

Question 9

Research into accounting regulation:

Accepted Answer

A) Supports capture theory. 
B) Is extensive. 
C) Shows that accounting is independent of political influence. 
D) Looks after the interests of a wide range of stakeholders. 
A) Supports capture theory. 
B) Is extensive. 
C) Shows that accounting is independent of political influence. 
D) Looks after the interests of a wide range of stakeholders.

Question 10

One of the rules-based standard disadvantages can be:

Accepted Answer

A) They allow for no manipulation. 
B) They can be very complex. 
C) They can be very simple. 
D) None of the above. 
A) They allow for no manipulation. 
B) They can be very complex. 
C) They can be very simple. 
D) None of the above.

Question 11

Which of the following is a fundamental assumption of Capture Theory?

Accepted Answer

A) Regulation is costly. 
B) People rationally advance their own self-interest. 
C) Economic markets are fragile. 
D) The market is an efficient market. 
A) Regulation is costly. 
B) People rationally advance their own self-interest. 
C) Economic markets are fragile. 
D) The market is an efficient market.

Question 12

Which of the following groups benefits most from rules based accounting regulation?

Accepted Answer

A) Shareholders. 
B) Managers. 
C) Auditors. 
D) Accountants. 
A) Shareholders. 
B) Managers. 
C) Auditors. 
D) Accountants.

Question 13

Which of the following was identified as a benefit when Australia accepted the international harmonisation of its accounting standards?

Accepted Answer

A) Reporting costs would be lowered. 
B) International comparability of financial statements would increase. 
C) The cost of capital would decrease. 
D) All of the above. 
A) Reporting costs would be lowered. 
B) International comparability of financial statements would increase. 
C) The cost of capital would decrease. 
D) All of the above.

Question 14

Which of the following is NOT a function of the AASB? standard setting.

Accepted Answer

A) Participate in the development of international accounting standards. 
B) Making accounting standards. 
C) Promoting international accounting standards. 
D) Enforcing compliance with accounting standards. 
A) Participate in the development of international accounting standards. 
B) Making accounting standards. 
C) Promoting international accounting standards. 
D) Enforcing compliance with accounting standards.

Question 15

Which of the following is NOT a disadvantage of regulation?

Accepted Answer

A) It can restrict communication. 
B) It can be difficult to reverse. 
C) It leads to standardisation. 
D) It can be difficult to determine the optimal regulations. 
A) It can restrict communication. 
B) It can be difficult to reverse. 
C) It leads to standardisation. 
D) It can be difficult to determine the optimal regulations.

Question 16

One of the advantages of principles-based standard is:

Accepted Answer

A) They do not improve representational faithfulness of financial statements. 
B) They allow for no professional judgement. 
C) They are generally simpler. 
D) None of the above. 
A) They do not improve representational faithfulness of financial statements. 
B) They allow for no professional judgement. 
C) They are generally simpler. 
D) None of the above.

Question 17

Which of the following is a fundamental assumption of public interest theory?

Accepted Answer

A) Regulation is costly. 
B) People rationally advance their own self-interest. 
C) Economic markets are fragile. 
D) There is an efficient market. 
A) Regulation is costly. 
B) People rationally advance their own self-interest. 
C) Economic markets are fragile. 
D) There is an efficient market.

Question 18

Which of the following can the AASB NOT do when adopting IFRSs?

Accepted Answer

A) Require additional disclosure. 
B) Change or remove requirements that are seen as anti-competitive. 
C) Change words to take into account Australian legislation. 
D) Limit the number of optional treatments. 
A) Require additional disclosure. 
B) Change or remove requirements that are seen as anti-competitive. 
C) Change words to take into account Australian legislation. 
D) Limit the number of optional treatments.

Question 19

Which of the following has NOT been identified as a problem with Australia accepting the international harmonisation of its accounting standards?

Accepted Answer

A) Too few countries have adopted international accounting standards. 
B) IFRS standards tend to be more complex. 
C) Compromises sometimes need to be made when creating standards. 
D) None of the above,they are all problems. 
A) Too few countries have adopted international accounting standards. 
B) IFRS standards tend to be more complex. 
C) Compromises sometimes need to be made when creating standards. 
D) None of the above,they are all problems.

Question 20

The Financial Reporting Council (FRC)are responsible for:

Accepted Answer

A) Appointing board members to the AASB. 
B) Broad oversight of the standard-setting process. 
C) Providing strategic direction and advice to the AASB. 
D) all of the above. 
A) Appointing board members to the AASB. 
B) Broad oversight of the standard-setting process. 
C) Providing strategic direction and advice to the AASB. 
D) all of the above.

Which of the following groups have been criticised for their failure to respond to exposure drafts?

Which of the following is NOT an advantage of accounting regulation?

Which of the following is a fundamental assumption of Bushfire theory?

Disadvantage of principles-based standards is:

Which of the following have been blamed for the Global Financial Crisis?

Which if the following is an advantage of rules-based accounting standards?

Signalling Theory postulates that:

Which of the following is NOT a key element of regulation?

Research into accounting regulation:

One of the rules-based standard disadvantages can be:

Which of the following is a fundamental assumption of Capture Theory?

Which of the following groups benefits most from rules based accounting regulation?

Which of the following was identified as a benefit when Australia accepted the international harmonisation of its accounting standards?

Which of the following is NOT a function of the AASB? standard setting.

Which of the following is NOT a disadvantage of regulation?

One of the advantages of principles-based standard is:

Which of the following is a fundamental assumption of public interest theory?

Which of the following can the AASB NOT do when adopting IFRSs?

Which of the following has NOT been identified as a problem with Australia accepting the international harmonisation of its accounting standards?

The Financial Reporting Council (FRC)are responsible for:

Contemporary Issues in Accounting

The Conceptual Framework for Financial Reporting

Measurement

Theories in Accounting

Products of the Financial Reporting Process

Corporate Governance

Capital Markets Research and Accounting

Earnings Management

Fair Value Accounting

Sustainability and Environmental Accounting

International Accounting

Filters

Exam 3: Standard Setting

Which of the following groups have been criticised for their failure to respond to exposure drafts?

Which of the following is NOT an advantage of accounting regulation?

Which of the following is a fundamental assumption of Bushfire theory?

Disadvantage of principles-based standards is:

Which of the following have been blamed for the Global Financial Crisis?

Which if the following is an advantage of rules-based accounting standards?

Signalling Theory postulates that:

Which of the following is NOT a key element of regulation?

Research into accounting regulation:

One of the rules-based standard disadvantages can be:

Which of the following is a fundamental assumption of Capture Theory?

Which of the following groups benefits most from rules based accounting regulation?

Which of the following was identified as a benefit when Australia accepted the international harmonisation of its accounting standards?

Which of the following is NOT a function of the AASB? standard setting.

Which of the following is NOT a disadvantage of regulation?

One of the advantages of principles-based standard is:

Which of the following is a fundamental assumption of public interest theory?

Which of the following can the AASB NOT do when adopting IFRSs?

Which of the following has NOT been identified as a problem with Australia accepting the international harmonisation of its accounting standards?

The Financial Reporting Council (FRC)are responsible for:

Contemporary Issues in Accounting

The Conceptual Framework for Financial Reporting

Measurement

Theories in Accounting

Products of the Financial Reporting Process

Corporate Governance

Capital Markets Research and Accounting

Earnings Management

Fair Value Accounting

Sustainability and Environmental Accounting

International Accounting

Filters