Book Title; Author

Chapter 01 - Multiple choice quiz


1.
Complete the following:
Australian accounting standards are referred to as ________ and international standards are referred to as __________.
A.
AASBs, IFRSs
B.
AASBs, IASs
C.
AASs, IFRSs
D.
A-IFRSs, IASs


2.
Accounting Standards approved by the Accounting Standards Review Board (ASRB):
A.
Had no legal backing under the Companies Act, and their application was optional.
B.
Had no legal backing under the Companies Act, although almost all companies followed their guidance.
C.
Had legal backing under the Companies Act, although companies could depart from the accounting standards if it was maintained that application did not result in the financial reports showing a 'true & fair view'
D.
Had legal backing under the Companies Act, and their application was mandatory at all times.


3.
The purpose of the conceptual framework introduced by the Australian Accounting Standards Board (AASB) in 1990 was:
A.
To provide a unifying basis for the development of accounting standards
B.
To replicate the project undertaken by the FASB in the United States
C.
To provide definitions of the basic elements of accounting
D.
To ensure that financial reports provided useful information to users.


4.
The Financial Reporting Council (FRC):
A.
oversees the work of the AASB and is responsible for appointing all members of the AASB.
B.
oversees the work of the AASB, but does not have the power to veto a standard made by the AASB.
C.
is responsible for the running of the Financial Reporting Panel (FRP)
D.
is an oversight body comprising key stakeholders from the professional accounting bodies.


5.
According to the ASIC Act (2001) a key way in which accounting standards should facilitate the Australian economy is by
A.
having regard to the interests of Australian corporations that propose to raise capital in major international financial markets.
B.
ensuring that all standards are relevant and reliable.
C.
reducing the cost of capital
D.
ensuring harmoniaation with IFRSs


6.
The role of the Urgent Issues Group (UIG) prior to it being disbanded was to:
A.
provide timely guidance on urgent financial reporting issues.
B.
advise the AASB on emerging and urgent financial reporting issues.
C.
prepare Issue Summaries for consideration by the AASB
D.
report to ASIC on divergent or unsatisfactory reporting practices.


7.
The Australian Securities and Investments Commission (ASIC) operates under the direction of:
A.
three Commissioners appointed by the Governor-General on the nomination of the Attorney General.
B.
three Commissioners appointed by the Attorney General
C.
three Commissioners appointed by the Governor-General on the nomination of the Treasurer.
D.
three Commissioners appointed by the Treasurer.


8.
A key role of the Australian Securities and Investments Commission (ASIC) is to ensure that all company financial statements lodged with it:
A.
present a true and fair view.
B.
are approved by the Financial Reporting Panel.
C.
comply with accounting standards
D.
comply with the Corporations Act, including accounting standards.


9.
Australian Securities Exchange (ASX) Listing Rules:
A.
are voluntary guidelines developed to promote the protection of security holders.
B.
may be waived by ASIC where it is felt that compliance would result in inhibiting a legitimate commercial transaction.
C.
may be waived by the ASX where it is felt that compliance would result in inhibiting a legitimate commercial transaction.
D.
must be followed at all times. Failure to comply will result in an entities securities being suspended from quotation or removed from the official list.


10.
In relation to International Financial Reporting Standards (IFRSs) and Exposure Drafts (EDs), the International Accounting Standards Board (IASB):
A.
has complete responsibility for all technical matters including preparing and issuing IFRS and EDs
B.
prepares IFRSs and EDs for approval by the IASC Foundation
C.
prepares IFRSs and EDs for approval by the Standards Advisory Council (SAC)
D.
must obtain feedback from the G4+1 prior to issuing IFRSs and EDs


11.
Which of the following statements is INCORRECT in relation to the due process of the International Accounting Standards Board (IASB):
A.
Before issuing an accounting standard the IASB must first issue an exposure draft for public comment.
B.
The IASB must hold a public hearing prior to formally issuing an accounting standard.
C.
The IASB may outsource detailed research to national standard setters.
D.
The IASB is required to consult the Standards Advisory Council (SAC) on major projects.


12.
The International Accounting Standards Committee (IASC) was formally replaced by the:
A.
International Federation of Accountants (IFAC);
B.
International Accounting Standards Board (IASB);
C.
International Financial Reporting Interpretations Committee (IFRIC);
D.
International Accounting Standards Foundation (IASF).


13.
The purpose of the Standards Advisory Council (SAC) is:
A.
to bring about convergence of national and international accounting standards.
B.
to assist the Financial Accounting Standards Board (FASB) in the United States with their convergence to international standards.
C.
provide a forum for organiaations and individuals with an interest in international financial reporting to participate in the standard-setting process.
D.
interpret the application of IFRS.


14.
Members of the International Financial Reporting Interpretations Committee (IFRIC) are appointed by:
A.
representatives from the key national standard setting bodies.
B.
the Chairman of the International Accounting Standards Board (IASB).
C.
the Chairman of the Standards Advisory Committee (SAC).
D.
the trustees of the IASC Foundation.


15.
The new series of accounting standards issued by the International Accounting Standards Board are named:
A.
International Accounting Standards (IASs);
B.
Standing Interpretations Committee Standards (SICSs);
C.
International Financial Reporting Standards (IFRSs);
D.
International Financial Reporting Interpretations (IFRICs).


16.
The actions and procedures surrounding the issue of a final accounting standard by the IASB, including publication of an exposure draft and a discussion document, and conducting a public hearing is known as:
A.
corporate governance;
B.
oversight;
C.
due process;
D.
convergence.


17.
Complete the following statement:
'International Financial Reporting Standards (IFRSs) reflect much greater use of the __________ measurement method and a movement away from the _____________ measurement method.
A.
original-cost: accrual-based;
B.
historical-cost: net present value;
C.
fair value: historical-cost;
D.
impairment cost: fair value.


18.
On 3 July 2002 the Financial Reporting Council (FRC) issued a bulletin requiring what type of entities to adopt standards issued by the IASB from 1 January 2005.
A.
all entities
B.
reporting entities
C.
for-profit entities
D.
listed entities


19.
Which of the following is not a clear rationale supporting the use of a single set of global accounting standards?
A.
reduces inconsistency in financial reports from different nations;
B.
improves understandability of nation-specific financial reports;
C.
decreases national standard-setting costs;
D.
monopoly control over accounting standard setting will lead to 'best practice' in financial reporting.


20.
When preparing the stable platform the International Accounting Standards Board (IASB) initially:
A.
adopted all the IASs issued by the International Accounting Standards Committee (IASC), making some amendments but not reconsidering them all in detail.
B.
adopted some of the IASs issued by the IASC, making no amendments to those IASs that were adopted.
C.
adopted all the IASs issued by the IASC, making substantial amendments to all IASs.
D.
adopted some of the IASs issued by the IASC, making substantial amendments to those IASs that were adopted.


21.
On adoption of the IASB Framework by the AASB (referred to as the AASB Framework) which Statements of Accounting Concepts (SACs) were removed from the conceptual framework for Australian accounting standards?
A.
all four Statement of Accounting Concepts were removed.
B.
SAC1 and SAC2 were removed
C.
SAC3 and SAC4 were removed
D.
none of the SACs were removed


22.
International Financial Reporting Standards (IFRSs) are not designed to apply to which of the following entities?
A.
publicly listed companies;
B.
non-listed companies;
C.
profit-oriented entities;
D.
not-for-profit organisations.


23.
The AAS series of accounting standards
A.
are no longer applicable, due to the introduction of A-IFRS accounting standards.
B.
apply to non-corporate entities, such as superannuation funds and the public sector.
C.
apply to not-for-profit organiaations.
D.
apply to non-reporting entities only.


24.
In terms of the numbering of AASB accounting standards:
A.
AASB 1-99 are equivalent to the IFRSs issued by the IASB.
B.
AASB 101 – 199 are equivalent to the IFRSs issued by the IASB.
C.
AASB 1-99 address domestic issues such as director and executive disclosures and consice finanical reports.
D.
AASB 101-199 address domestic issues such as director and executive disclosures and concise financial reports.


25.
Which of the following was NOT an argument of the AASB in favour of initially removing optional treatments from IAS standards when preparing A-IFRS equivalent standards?
A.
The IASB intends not to have optional treatments in its IFRS and to progressively remove them from the 'old' IASs.
B.
The AASB could incur regulatory risk in that the role of the AASB is to set standards that facilitate comparability.
C.
The AASB could lose credibility by allowing more choices than previously available under Australian accounting standards.
D.
by continuing to allow optional treatments, Australian entities are disadvantaged relative to their European counterparts.


26.
When developing Australian accounting standards, the AASB:
A.
designs accounting standards to apply to the financial reports of all profit-oriented entities.
B.
designs accounting standards to apply to private sector entities.
C.
adopts a sector-neutral approach.
D.
adopts a multi-sector approach.


27.
Which of the following is NOT included as an addition by the AASB when issuing an IFRS accounting standards as an A-IFRS accounting standards?
A.
text relating to not-for-profit entities
B.
text relating to options in the IFRS standards that the AASB has removed.
C.
additional guidance
D.
a section explaining the key differences between each 'old' Australian standards and each 'new' A-IFRS standard.


28.
Which of the combinations below best completes the following statement?
International Financial Reporting Standards are more _________ based rather than _________ based, and so tend to have far _________ numerical thresholds than their USA counterparts.
A.
principles; rules; fewer;
B.
rules; principles; fewer;
C.
principles; rules; more;
D.
rules; principles; more.


29.
The Norwalk Agreement relates to:
A.
the Securities and Exchange Commissions (SECs) commitment to eliminating their requirement that foreign entities reconcile financial statements prepared under IFRS with US GAAP.
B.
an agreement between the SEC and the Financial Accounting Standards Board (FASB) to work towards convergence with IFRS standards.
C.
an agreement between the SEC and the IASB for the IASB to consider the removal of optional treatments from IFRS standards.
D.
the goal of the IASB and the FASB to converge US GAAP and IFRS.


30.
The Roadmap for convergence between IFRSs and US GAAP relates to;
A.
The IASB adopting US GAAP standards
B.
The FASB adopting IFRS standards
C.
a common set of high quality global standards
D.
the removal of optional treatments in both IFRS and US GAAP standards



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