Question 1

In the U.S., the word "reserve" always means:

Accepted Answer

A)  Impairment 
B)  A market value adjustment 
C)  Provision 
D)  A depreciation write-down

Question 2

Why is it important to have a Global Code of Ethics for professional accountants around the world? That is, what is such a code trying to accomplish?

Accepted Answer

The answer of Why is it important to have a...

Question 3

In the SEC v. Siemens Aktiengesellschaft case, each of the following charges were made against the company's' Managing Board except for:

Accepted Answer

A)  The Board failed to ensure that Siemens met the U.S. regulatory and anti-bribery provisions of the Foreign Corrupt Practices Act 
B)  The Board failed to meet its obligations with respect to compliance procedures at Siemens 
C)  The Board failed to adequately supervise the auditors of Siemens 
D)  The Board created a corporate culture that contributed toward tolerating and even rewarding bribery

Question 4

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 these

Question 5

The primarily role of the Supervisory Board is to:

Accepted Answer

A)  Manage the enterprise for the benefit of various stakeholder groups 
B)  Work with the auditors in their review of financial statements 
C)  Work with the managing board in running day-to-day operations 
D)  Oversee and advise the Managing Board on policy matters

Question 6

Full-IFRS permits the revaluation of property, plant, and equipment while IFRS for SMEs does not. In the U.S., the cost method (less amortization) must be used. From a conceptual framework perspective, is it possible to justify the use of the revaluation technique? Be sure to describe relevant concepts in answering this question. Why do you think IFRS for SMEs does not permit revaluation while full-IFRS does? Are these inconsistent requirements?

Accepted Answer

The answer of Full-IFRS permits the revaluation of property, plant,...

Question 7

Gray's study uses secrecy as the preference for confidentiality and restrictions on disclosures; this is associated with all of the following except:

Accepted Answer

A)  Higher power distance 
B)  Lower masculinity 
C)  Lower individualism 
D)  Higher uncertainty avoidance

Question 8

Explain how cultural values that exist in a country influence a country's accounting values.

Accepted Answer

The answer of Explain how cultural values that exist in...

Question 9

One problem of a more principles-based system that was pointed out in an SEC study is that they:

Accepted Answer

A)  Tend to be rules-based more than objectives-oriented standards 
B)  May present enforcement problems 
C)  Use bright-line tests 
D)  All of these

Question 10

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

Accepted Answer

A)  Some government ownership of Indian entities 
B)  Family ownership of Indian entities 
C)  A large industrial group may own shares in an Indian entity 
D)  All of these

Question 11

A member body of the International Federation of Accountants (IFAC) should follow the provisions of the home country's code of ethics rather than the Code of Ethics for Professional Accountants (IFAC Code) when:

Accepted Answer

A)  The home country standards of the member body are more stringent than those in the IFAC Code. 
B)  The member body disagrees with IFAC Code provisions. 
C)  The home country standards of the member body are less strict than those in the IFAC Code. 
D)  All of these.

Question 12

The IFAC, IAESB and IESBA ethical principles are similar to those in the AICPA Code except for:

Accepted Answer

A)  Integrity 
B)  Objectivity 
C)  True and fair view 
D)  Professional competence

Question 13

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)  Olympus 
D)  Royal Dutch Shell

Question 14

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 answer of In some countries the laws and regulations...

Question 15

The U.K. Bribery Act is enforced by the Serious Fraud Office (SFO); the agency has provided a list of corruption indicators. These include all of the following except for:

Accepted Answer

A)  Abnormal cash payments and lavish gifts. 
B)  Agreeing to contracts favorable to the organization. 
C)  Private meeting with public contractors or companies hoping to tender an offer for contracts. 
D)  Unexplained preference for certain contractors during the tendering process.

Question 16

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

Accepted Answer

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

Question 17

Under a dual board system, the board that carries out management directives for the benefit of various stakeholder groups is:

Accepted Answer

A)  The Management Board 
B)  The Supervisory Board 
C)  The Board of Governors 
D)  The Board of Trustees

Question 18

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

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