Question 1

Which of these is not one of the benefits of a conceptual framework?

Accepted Answer

A) Reporting requirements will be more consistent and logical 
B) It may allow firms to reduce their reported profit 
C) The need for specific accounting standards should be reduced 
D) Standard setting boards will be more accountable for their actions 
A) Reporting requirements will be more consistent and logical 
B) It may allow firms to reduce their reported profit 
C) The need for specific accounting standards should be reduced 
D) Standard setting boards will be more accountable for their actions

Question 2

One of the benefits of a conceptual framework,put forward by Australian standard setters,is that preparers and auditors would find it easier to understand the financial reporting requirements they face.

Accepted Answer

A) True 
 B)False

Question 3

Which of these is not a criticism of conceptual framework projects?

Accepted Answer

A) The logic is circular 
B) The definition of the elements provide no guidance to practising accountants 
C) There is no prior agreement on objectives 
D) The measurement of the elements of financial reporting is too highly specified 
A) The logic is circular 
B) The definition of the elements provide no guidance to practising accountants 
C) There is no prior agreement on objectives 
D) The measurement of the elements of financial reporting is too highly specified

Question 4

Stating that Australia and New Zealand follow a 'sector neutral' approach to standard setting means that:

Accepted Answer

A) Issues relating to the for-profit and the not-for-profit sectors are considered simultaneously with the view to applying the same standards to both sectors 
B) Issues relating to the for-profit sector are considered before later applying the same principles to the not-for-profit sector 
C) Issues relating to the not-for-profit sector are considered before later applying the same principles to the for-profit sector 
D) Issues for-profit and not-for-profit sectors are considered simultaneously but with the purpose of drawing up separate standards for each sector. 
A) Issues relating to the for-profit and the not-for-profit sectors are considered simultaneously with the view to applying the same standards to both sectors 
B) Issues relating to the for-profit sector are considered before later applying the same principles to the not-for-profit sector 
C) Issues relating to the not-for-profit sector are considered before later applying the same principles to the for-profit sector 
D) Issues for-profit and not-for-profit sectors are considered simultaneously but with the purpose of drawing up separate standards for each sector.

Question 5

The IASB Framework includes four principal qualitative characteristics,understandability,relevance,reliability and comparability.

Accepted Answer

A) True 
 B)False

Question 6

Taxation rules are not a source of authority in accounting.

Accepted Answer

A) True 
 B)False

Question 7

In Australia,in the latter years of the 1990's,more progress was made on developing the conceptual framework than in promulgating individual accounting standards.

Accepted Answer

A) True 
 B)False

Question 8

Gerboth views conceptual frameworks as policy documents based on the professional values and self-interest of accountants

Accepted Answer

A) True 
 B)False

Question 9

To be relevant accounting information should have which of these characteristics?

Accepted Answer

A) The transaction or other event relating to the accounting information should have occurred 
B) It must assist in making predictions about future situations or must help confirm past predictions of users 
C) The financial information should faithfully represent transactions and events without bias or undue error 
D) To be relevant accounting information should have all of the above characteristics 
A) The transaction or other event relating to the accounting information should have occurred 
B) It must assist in making predictions about future situations or must help confirm past predictions of users 
C) The financial information should faithfully represent transactions and events without bias or undue error 
D) To be relevant accounting information should have all of the above characteristics

Question 10

The corporate collapses in 2001-2002 in the United States:

Accepted Answer

A) Increased the emphasis on principles-based standards 
B) Increased the emphasis on rules-based standards 
C) Had no effect on whether standards were rule-based or principles-based 
D) Led to a reduction in the number of standards issued because of a perception of 'standards overload' 
A) Increased the emphasis on principles-based standards 
B) Increased the emphasis on rules-based standards 
C) Had no effect on whether standards were rule-based or principles-based 
D) Led to a reduction in the number of standards issued because of a perception of 'standards overload'

Question 11

The point that is not a reason why auditors began to have a greater focus on auditing business risk in the 1990's is:

Accepted Answer

A) The release of the 1992 report Internal Control - Integrated Framework,by the Committee of Sponsoring organisations (COSO) 
B) It was a justification to increase audit fees for clients 
C) Gaps in clients' internal controls provided an opportunity for auditors to sell non-audit services. 
D) None of these,i.e.all are reasons as to why auditors began to have a greater focus on auditing business risk in the 1990's 
A) The release of the 1992 report Internal Control - Integrated Framework,by the Committee of Sponsoring organisations (COSO) 
B) It was a justification to increase audit fees for clients 
C) Gaps in clients' internal controls provided an opportunity for auditors to sell non-audit services. 
D) None of these,i.e.all are reasons as to why auditors began to have a greater focus on auditing business risk in the 1990's

Question 12

In June 2009,in relation to the IASB/FASB joint conceptual framework project,one exposure draft relating to the objectives and qualitative characteristics has been issued.Which of these statements concerning the reception of the exposure draft is true?

Accepted Answer

A) Most respondents agreed with designating present and potential capital providers as the primary user group for general purpose financial reporting 
B) Most respondents agreed that not designating stewardship as a separate objective was unimportant 
C) Most respondents agreed with the list of qualitative characteristics included in the exposure draft. 
D) Most respondents agreed that financial reports should be prepared from the proprietorship perspective 
A) Most respondents agreed with designating present and potential capital providers as the primary user group for general purpose financial reporting 
B) Most respondents agreed that not designating stewardship as a separate objective was unimportant 
C) Most respondents agreed with the list of qualitative characteristics included in the exposure draft. 
D) Most respondents agreed that financial reports should be prepared from the proprietorship perspective

Question 13

In relation to IAS 8 the two statements that are correct are:
I When making judgements reference shall be made firstly to the Framework and secondly to standards and interpretations dealing with similar and related issues
II When making judgements reference shall be made firstly to standards and interpretations dealing with similar and related issues and secondly to the Framework
III Material in the Framework is binding on preparers of financial statements
IV Material in the Framework is not binding on preparers of financial statements

Accepted Answer

A) i)and iii) 
B) ii)and iii) 
C) ii)and iv) 
D) i)and iv) 
A) i)and iii) 
B) ii)and iii) 
C) ii)and iv) 
D) i)and iv)

Question 14

One of the key concepts of the auditing theory of Mautz and Sharaf is auditor independence.

Accepted Answer

A) True 
 B)False

Question 15

The IASB's concept statement encompasses special and general-purpose financial reporting.

Accepted Answer

A) True 
 B)False

Question 16

Both the IASB and the FASB frameworks consider the main objective of financial reporting is to communicate financial information to users.The information is to be selected on the basis of its usefulness in the economic decision-making process.This objective is seen to be achieved by reporting information that is:
I Useful in making economic decisions
II Useful in assessing cash flow prospects
III About enterprise resources,claims to those resources and changes in them

Accepted Answer

A) i,ii 
B) i,iii 
C) ii,iii 
D) i,ii,iii 
A) i,ii 
B) i,iii 
C) ii,iii 
D) i,ii,iii

Which of these is not one of the benefits of a conceptual framework?

One of the benefits of a conceptual framework,put forward by Australian standard setters,is that preparers and auditors would find it easier to understand the financial reporting requirements they face.

Which of these is not a criticism of conceptual framework projects?

Stating that Australia and New Zealand follow a 'sector neutral' approach to standard setting means that:

The IASB Framework includes four principal qualitative characteristics,understandability,relevance,reliability and comparability.

Taxation rules are not a source of authority in accounting.

In Australia,in the latter years of the 1990's,more progress was made on developing the conceptual framework than in promulgating individual accounting standards.

Gerboth views conceptual frameworks as policy documents based on the professional values and self-interest of accountants

To be relevant accounting information should have which of these characteristics?

The corporate collapses in 2001-2002 in the United States:

The point that is not a reason why auditors began to have a greater focus on auditing business risk in the 1990's is:

In June 2009,in relation to the IASB/FASB joint conceptual framework project,one exposure draft relating to the objectives and qualitative characteristics has been issued.Which of these statements concerning the reception of the exposure draft is true?

One of the key concepts of the auditing theory of Mautz and Sharaf is auditor independence.

The IASB's concept statement encompasses special and general-purpose financial reporting.

Introduction

Accounting Theory Construction

Role of Theory in Accounting Regulation

Measurement

Accounting Measurement Systems

Assets

Liabilities and Owners Equity

Revenue

Expenses

Positive Theory of Accounting Policy and Disclosure

Capital Market Research

Behavioural Research

Emerging Issues in Accounting and Auditing

Filters

Exam 4: Theory Underpinning Accounting Standards

Which of these is not one of the benefits of a conceptual framework?

One of the benefits of a conceptual framework,put forward by Australian standard setters,is that preparers and auditors would find it easier to understand the financial reporting requirements they face.

Which of these is not a criticism of conceptual framework projects?

Stating that Australia and New Zealand follow a 'sector neutral' approach to standard setting means that:

The IASB Framework includes four principal qualitative characteristics,understandability,relevance,reliability and comparability.

Taxation rules are not a source of authority in accounting.

In Australia,in the latter years of the 1990's,more progress was made on developing the conceptual framework than in promulgating individual accounting standards.

Gerboth views conceptual frameworks as policy documents based on the professional values and self-interest of accountants

To be relevant accounting information should have which of these characteristics?

The corporate collapses in 2001-2002 in the United States:

The point that is not a reason why auditors began to have a greater focus on auditing business risk in the 1990's is:

In June 2009,in relation to the IASB/FASB joint conceptual framework project,one exposure draft relating to the objectives and qualitative characteristics has been issued.Which of these statements concerning the reception of the exposure draft is true?

One of the key concepts of the auditing theory of Mautz and Sharaf is auditor independence.

The IASB's concept statement encompasses special and general-purpose financial reporting.

Introduction

Accounting Theory Construction

Role of Theory in Accounting Regulation

Measurement

Accounting Measurement Systems

Assets

Liabilities and Owners Equity

Revenue

Expenses

Positive Theory of Accounting Policy and Disclosure

Capital Market Research

Behavioural Research

Emerging Issues in Accounting and Auditing

Filters