Part -1:
Que1) What is known as the ‘Norwalk Agreement'?
Select one:
a. The IASB met with the chairs of the partner standards setters in 2001 and 2002 to discuss various partnership working arrangements.
b. The FASB and IASB held their first joint meeting in September 2002 at the FASB's headquarters in Connecticut.
c. The IASB and the FASB had a joint meeting in 2003 in which they were able to set an objective of reaching agreement on a coordinated, longer-term technical agenda by April 2004.
d. None of these are correct.
Que2) What are the major goals of reporting regulation?
Select one:
a. Protection of small and unsophisticated individual investors against better-informed insiders and promoters.
b. To address the needs of sophisticated users such as financial analysts and institutional investors
c. To protect creditors (such as suppliers) by restricting dividends and other payments from a corporation to residual claimants (such as owners or tax authorities).
d. All of the above.
Que3) Which factors can influence a regulator's strength to impose financial standards?
Select one:
a. The authority that it holds bestowed by the national legislature.
b. The size of its budget.
c. The competency of its staff and the quality of training.
d. All of the above.
e. None of the above.
Que 4) In spite of the wide scale adoption of IFRS around the world, which institutional factors are likely to remain a major source of heterogeneity in reporting practices?
Select one:
a. Differences in capital markets.
b. Securities regulation.
c. Enforcement systems.
d. Economic development.
e. All of the above.
f. None of the above.
Que 5) ‘If the goal is to achieve comparable reporting, even harmonising enforcement is not going to be adequate. We also need to reduce differences in firms' reporting incentives.'
Select one:
a. True
b. False.
Que 6) Accounting standards give firms substantial reporting discretion because the application of the standards generally involves considerable judgement.
Select one:
a. True
b. False.
Que 7) Previous research indicates that the ownership structure has no bearing on the reporting outcome.
Select one:
a. True
b. False.
Que 8) A change in attitudes will only happen when executives start believing that the lower accounting income is not necessarily the best option and that the best option is the one that reflects the company's economic reality.
Select one:
a. True
b. False.
Que 9) IFRS 3, Business combinations issued in March 2004, narrowed the differences with the FASB in how a business combination is accounted for in which of the following ways?
Select one:
a. Eliminating the use of the pooling method, as did statement 141.
b. Converging the accounting for acquired goodwill (no longer amortised but reviewed annually for impairment, as in statement 142).
c. A and B.
d. None of the above.
Que 10) Why does consolidation policy present a significant challenge to convergence between IFRS and the US GAAP?
Select one:
a. Distinctive ownership arrangements among European Union firms relative to US firms will put pressure on consolidation policy.
b. Evidence suggests that while IASB intends to develop qualitative standards for consolidation policy, FASB's guidance can be seen as quantitative.
c. Both of the above.
d. Neither of the above.
Part -2:
Que 1) How much discretion should a firm have in what it needs to report?
Que 2) How should enforcement mechanisms be devised?
Que 3) Discuss the factors affecting reporting incentives for firms.
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