Question 1

The Norwalk agreement refers to:

Accepted Answer

A)  The commitment of the U.S. and European Union to adopt one set of accounting standards 
B)  The commitment of FASB and the International Accounting Standards Board (IAS
B)  to adopt one set of accounting standards 
C)  The commitment of FASB and IASB to the convergence of U.S. GAAP and international accounting standards 
D)  The agreement that ended World War II 
A)  The commitment of the U.S. and European Union to adopt one set of accounting standards 
B)  The commitment of FASB and the International Accounting Standards Board (IAS
B)  to adopt one set of accounting standards 
C)  The commitment of FASB and IASB to the convergence of U.S. GAAP and international accounting standards 
D)  The agreement that ended World War II

Question 2

Secret reserves are designed to conceal the true financial position and earnings, which are different than shown on the balance sheet and income statement. The best statement of how secret reserves are related to fraud and ethics is:

Accepted Answer

A)  Secret reserves often lead to smoothing net income over time. 
B)  Secret reserves make the information in financial statements inconsistent. 
C)  Secret reserves are legal and normal operating practices in all countries around the world. 
D)  Secret reserves can give the sense of financial security to the shareholders and regulators. 
A)  Secret reserves often lead to smoothing net income over time. 
B)  Secret reserves make the information in financial statements inconsistent. 
C)  Secret reserves are legal and normal operating practices in all countries around the world. 
D)  Secret reserves can give the sense of financial security to the shareholders and regulators.

Question 3

Each of the following is an example of the difference between application of full-IFRS and IFRS for SMEs except for:

Accepted Answer

A)  Cost or revaluation method for full-IFRS; cost method only for IFRS for SMEs 
B)  Revaluation method for full-IFRS; cost or revaluation for IFRS for SMEs 
C)  Expensing of all research and development costs as incurred for full-IFRS and capitalizing and amortizing development costs that meet specific criteria; expensing of all research and development costs as incurred for SMEs 
D)  Capitalizing borrowing costs if certain criteria are met for full-IFRS; expensing all borrowing costs for IFRS for SMEs 
A)  Cost or revaluation method for full-IFRS; cost method only for IFRS for SMEs 
B)  Revaluation method for full-IFRS; cost or revaluation for IFRS for SMEs 
C)  Expensing of all research and development costs as incurred for full-IFRS and capitalizing and amortizing development costs that meet specific criteria; expensing of all research and development costs as incurred for SMEs 
D)  Capitalizing borrowing costs if certain criteria are met for full-IFRS; expensing all borrowing costs for IFRS for SMEs

Question 4

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 5

Gray uses Hofstede's cultural values to identify four widely recognized accounting values; these values include all of the following except for:

Accepted Answer

A)  Transparency 
B)  Representational faithfulness 
C)  Uncertainty 
D)  Conservatism 
A)  Transparency 
B)  Representational faithfulness 
C)  Uncertainty 
D)  Conservatism

Question 6

The CIMA Code of Ethics identifies the following common threats to the fundamental principles of professional behavior except for:

Accepted Answer

A)  Self-motivated threat 
B)  Self-interest threat 
C)  Familiarity threat 
D)  Intimidation threat 
A)  Self-motivated threat 
B)  Self-interest threat 
C)  Familiarity threat 
D)  Intimidation threat

Question 7

A common set of accounting standards on an international level can help to achieve each of the following except for:

Accepted Answer

A)  Facilitate the understandability of financial reports prepared outside the home country of a potential investor 
B)  Facilitate international investment 
C)  Provide a foundation for professional judgment and support the implementation of international financial reporting standards (IFRS) 
D)  Facilitate the enforcement of IFRS 
A)  Facilitate the understandability of financial reports prepared outside the home country of a potential investor 
B)  Facilitate international investment 
C)  Provide a foundation for professional judgment and support the implementation of international financial reporting standards (IFRS) 
D)  Facilitate the enforcement of IFRS

Question 8

The term "small and medium-sized" entities in the IASB's pronouncement on IFRS for Small and Medium-sized Entities (SMEs) defines SMEs as:

Accepted Answer

A)  Those entities with public accountability that publish general purpose financial statements 
B)  Those entities without public accountability that publish general purpose financial statements 
C)  Those entities that use IFRS in their general purpose financial statements 
D)  Those entities that use U.S. GAAP in their general purpose financial statements 
A)  Those entities with public accountability that publish general purpose financial statements 
B)  Those entities without public accountability that publish general purpose financial statements 
C)  Those entities that use IFRS in their general purpose financial statements 
D)  Those entities that use U.S. GAAP in their general purpose financial statements

Question 9

The trigger event that led to the disclosure of the scandal at Parmalat was:

Accepted Answer

A)  Almost €4 billion of company funds that were supposed to be held in an account at Bank of America did not exist 
B)  The company stuffed the channels with product that it eventually was not purchased by customers 
C)  Parmalat officers violated the Foreign Corrupt Practices Act 
D)  The company sold sour milk 
A)  Almost €4 billion of company funds that were supposed to be held in an account at Bank of America did not exist 
B)  The company stuffed the channels with product that it eventually was not purchased by customers 
C)  Parmalat officers violated the Foreign Corrupt Practices Act 
D)  The company sold sour milk

Question 10

One way to characterize the term "true and fair view is" that it:

Accepted Answer

A)  It is used to determine which international auditing standards should be used 
B)  It is used to assess whether the entity has met the comply or explain provisions in corporate governance codes 
C)  It is a governing criterion by which financial statements are to be judged 
D)  All of these 
A)  It is used to determine which international auditing standards should be used 
B)  It is used to assess whether the entity has met the comply or explain provisions in corporate governance codes 
C)  It is a governing criterion by which financial statements are to be judged 
D)  All of these

Question 11

The SEC is now calling the movement of U.S. GAAP to IFRS:

Accepted Answer

A)  Comparability 
B)  Condorsement 
C)  Convergence 
D)  Conversion 
A)  Comparability 
B)  Condorsement 
C)  Convergence 
D)  Conversion

Question 12

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

Accepted Answer

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

Question 13

The primary accounting issue in the Royal Dutch Shell case is:

Accepted Answer

A)  The failure of the company to properly account for oil exploration costs 
B)  The failure of the company to adhere to provisions of the Foreign Corrupt Practices Act 
C)  The failure of the company to adhere to SEC rules and the accounting for proved reserves 
D)  All of these 
A)  The failure of the company to properly account for oil exploration costs 
B)  The failure of the company to adhere to provisions of the Foreign Corrupt Practices Act 
C)  The failure of the company to adhere to SEC rules and the accounting for proved reserves 
D)  All of these

Question 14

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 15

The Olympus case deals with which of the following accounting issues:

Accepted Answer

A)  Booking impairment losses 
B)  Selling bad assets to make investment losses smaller 
C)  Concealing investment losses 
D)  All of these
Essay Questions 
A)  Booking impairment losses 
B)  Selling bad assets to make investment losses smaller 
C)  Concealing investment losses 
D)  All of these
Essay Questions

Question 16

The Autonomy case deals with which of the following accounting issues:

Accepted Answer

A)  Valuation of the British software company 
B)  Secret reserves 
C)  Fraud committed by KPMG 
D)  All of these 
A)  Valuation of the British software company 
B)  Secret reserves 
C)  Fraud committed by KPMG 
D)  All of these

Question 17

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 regulato

Question 18

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 19

The difference between provisions and reserves can best be characterized as:

Accepted Answer

A)  Provisions are liabilities recognized by charges against profit whereas a reserve is an element of shareholders' equity 
B)  Provisions are an element of shareholders' equity whereas a reserve is a liability recognized by charges against profit 
C)  Provisions reduce assets to net realizable value whereas reserves are liabilities recognized by charges against profit 
D)  Reserves always reduce profits 
A)  Provisions are liabilities recognized by charges against profit whereas a reserve is an element of shareholders' equity 
B)  Provisions are an element of shareholders' equity whereas a reserve is a liability recognized by charges against profit 
C)  Provisions reduce assets to net realizable value whereas reserves are liabilities recognized by charges against profit 
D)  Reserves always reduce profits

Question 20

The exposure draft, Responding to a Suspected Illegal Act, states that a professional accountant who suspects some act or activity may be illegal would be required to do each of the following depending on the outcome of discussions at each stage of the process except for:

Accepted Answer

A)  Discuss the issue with the appropriate level of management 
B)  Take the issue to higher levels of management 
C)  Discuss the issue to the external auditors 
D)  Take the issue to outside authorities if necessary 
A)  Discuss the issue with the appropriate level of management 
B)  Take the issue to higher levels of management 
C)  Discuss the issue to the external auditors 
D)  Take the issue to outside authorities if necessary

The Norwalk agreement refers to:

Secret reserves are designed to conceal the true financial position and earnings, which are different than shown on the balance sheet and income statement. The best statement of how secret reserves are related to fraud and ethics is:

Each of the following is an example of the difference between application of full-IFRS and IFRS for SMEs except for:

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

Gray uses Hofstede's cultural values to identify four widely recognized accounting values; these values include all of the following except for:

The CIMA Code of Ethics identifies the following common threats to the fundamental principles of professional behavior except for:

A common set of accounting standards on an international level can help to achieve each of the following except for:

The term "small and medium-sized" entities in the IASB's pronouncement on IFRS for Small and Medium-sized Entities (SMEs) defines SMEs as:

The trigger event that led to the disclosure of the scandal at Parmalat was:

One way to characterize the term "true and fair view is" that it:

The SEC is now calling the movement of U.S. GAAP to IFRS:

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

The primary accounting issue in the Royal Dutch Shell case is:

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.

The Olympus case deals with which of the following accounting issues:

The Autonomy case deals with which of the following accounting issues:

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?

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

The difference between provisions and reserves can best be characterized as:

The exposure draft, Responding to a Suspected Illegal Act, states that a professional accountant who suspects some act or activity may be illegal would be required to do each of the following depending on the outcome of discussions at each stage of the process except for:

Ethical Reasoning: Implications for Accounting

Cognitive Processes and Ethical Decision Making in Accounting

Creating an Ethical Organization Environment and Effective Corporate Governance Systems

Aicpa Code of Professional Conduct

Fraud in Financial Statements and Auditor Responsibilities

Legal, Regulatory, and Professional Obligations of Auditors

Earnings Management and the Quality of Financial Reporting

Filters

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

The Norwalk agreement refers to:

Secret reserves are designed to conceal the true financial position and earnings, which are different than shown on the balance sheet and income statement. The best statement of how secret reserves are related to fraud and ethics is:

Each of the following is an example of the difference between application of full-IFRS and IFRS for SMEs except for:

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

Gray uses Hofstede's cultural values to identify four widely recognized accounting values; these values include all of the following except for:

The CIMA Code of Ethics identifies the following common threats to the fundamental principles of professional behavior except for:

A common set of accounting standards on an international level can help to achieve each of the following except for:

The term "small and medium-sized" entities in the IASB's pronouncement on IFRS for Small and Medium-sized Entities (SMEs) defines SMEs as:

The trigger event that led to the disclosure of the scandal at Parmalat was:

One way to characterize the term "true and fair view is" that it:

The SEC is now calling the movement of U.S. GAAP to IFRS:

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

The primary accounting issue in the Royal Dutch Shell case is:

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.

The Olympus case deals with which of the following accounting issues:

The Autonomy case deals with which of the following accounting issues:

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?

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

The difference between provisions and reserves can best be characterized as:

The exposure draft, Responding to a Suspected Illegal Act, states that a professional accountant who suspects some act or activity may be illegal would be required to do each of the following depending on the outcome of discussions at each stage of the process except for:

Ethical Reasoning: Implications for Accounting

Cognitive Processes and Ethical Decision Making in Accounting

Creating an Ethical Organization Environment and Effective Corporate Governance Systems

Aicpa Code of Professional Conduct

Fraud in Financial Statements and Auditor Responsibilities

Legal, Regulatory, and Professional Obligations of Auditors

Earnings Management and the Quality of Financial Reporting

Filters