Advanced Accounting 13th Edition By Joe Ben Hoyle – Test Bank

Chapter 11 – Worldwide Accounting Diversity and International Accounting Standards

Multiple Choice:

[QUESTION]
1. In the United States, foreign companies filing annual reports with the SEC that are not prepared in accordance with U.S. GAAP must:
A) Present financial statements that comply with international GAAP.
B) Conform with U.S. GAAP or present a reconciliation to U.S. GAAP.
C) Have a demonstrated need for capital to be used for operations in the U.S.
D) Use the U.S. dollar as their reporting currency.
E) Either use IFRS, or otherwise use foreign GAAP with a reconciliation to U.S. GAAP.
Answer: E
Learning Objective: 11-07
Topic: SEC recognition of IFRS
Difficulty: 1 Easy
Blooms: Understand
AACSB: Thinking
AACSB: Diversity
AICPA: BB Global
AICPA: FN Measurement

[QUESTION]
2. Which of the following is not a likely step to furthering convergence of FASB and IFRS?
A) FASB adopting an existing IASB Standard.
B) IASB adopting an existing FASB standard.
C) FASB and IASB issuing an identical standard.
D) FASB working with IASB to develop a new standard.
E) Realizing that identical standards, rather than similar standards, is not realistic.
Answer: C
Learning Objective: 11-07
Topic: FASB–IASB Convergence process
Difficulty: 2 Medium
Blooms: Remember
AACSB: Reflective Thinking
AACSB: Diversity
AICPA: BB Global
AICPA: BB Legal

[QUESTION]
3. All of the following are influences on the development of a country’s financial reporting practices except:
A) The country’s legal system.
B) The country’s political system.
C) The taxation system.
D) The country’s cultural system.
E) The country’s level of inflation.
Answer: D
Learning Objective: 11-01
Topic: Accounting diversity―Factors of influence
Difficulty: 2 Medium
Blooms: Remember
AACSB: Reflective Thinking
AACSB: Diversity
AICPA: BB Global
AICPA: BB Legal

[QUESTION]
4. Which of the following is a pronouncement originally issued by the IASC and is not a pronouncement originally issued by the IASB?
A) Business Combinations.
B) First-Time Adoption of IFRS.
C) Financial Instruments: Disclosures.
D) Interim Financial Reporting.
E) Operating Segments.
Answer: D
Learning Objective: 11-03
Topic: IFRS―Types of pronouncements
Difficulty: 3 Hard
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Global
AACSB: Diversity
AICPA: FN Research

[QUESTION]
5. In countries of Latin America:
A) Accounting practice currently emphasizes political colonialism.
B) Accounting standards previously emphasized accounting highly inflationary economies.
C) Banks are the primary source of financing for companies.
D) Accounting standards focus are based on recent market economy reforms.
E) Accounting information is prepared to meet the needs of governmental planners.
Answer: B
Learning Objective: 11-01
Topic: Accounting diversity―Factors of influence
Difficulty: 1 Easy
Blooms: Remember
AACSB: Reflective thinking
AACSB: Diversity
AICPA: BB Global
AICPA: BB Legal

[QUESTION]
6. Which of the following is not a way for a country to use IFRS?
A) Require foreign companies listed on that country’s stock exchange to use IFRS for consolidated financial statements.
B) Allow foreign companies listed on that country’s stock exchange to use IFRS.
C) Permit its domestic companies listed on that country’s stock exchange to use IFRS.
D) Adopt IFRS as that country’s national GAAP.
E) All of these answer choices are correct.
Answer: E
Learning Objective: 11-04
Topic: IFRS―Usage around the world
Difficulty: 2 Medium
Blooms: Remember
AACSB: Reflective Thinking
AACSB: Diversity
AICPA: BB Global
AICPA: BB Legal

[QUESTION]
7. Convergence of accounting standards would not occur by:
A) FASB adopting an existing IASB standard.
B) IASB adopting an existing FASB standard.
C) IASB issuing a new standard.
D) IASB and FASB jointly developing a new standard.
E) IASB and FASB each issuing a similar but not identical standard.
Answer: C
Learning Objective: 11-07
Topic: FASB–IASB Convergence process
Difficulty: 2 Medium
Blooms: Remember
AACSB: Reflective Thinking
AACSB: Diversity
AICPA: BB Global
AICPA: FN Research

[QUESTION]
8. The types of differences that exist between IFRS and U.S. GAAP would not generally include:
A) Presentation differences.
B) Measurement differences.
C) Disclosure differences.
D) Comparability differences.
E) Classification differences.
Answer: D
Learning Objective: 11-08
Topic: IFRS–US GAAP differences―Select the type
Difficulty: 1 Easy
Blooms: Remember
AACSB: Reflective Thinking
AACSB: Diversity
AICPA: BB Global
AICPA: FN Measurement

[QUESTION]
9. Which of the following is not true about IFRS?
A) The IASB does not have the ability to enforce proper usage of IFRS.
B) IFRS is available to any organization or nation that wishes to use those standards.
C) IFRS is a comprehensive set of financial reporting standards.
D) IFRS includes only pronouncements issued by the IASB.
E) IFRS are considered as generally accepted accounting principles.
Answer: D
Learning Objective: 11-03
Topic: IFRS―Types of pronouncements
Difficulty: 2 Medium
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Global
AICPA: FN Research

[QUESTION]
10. Which one of the following is not a background or qualification requirement for full-time IASB members?
A) Professional competence.
B) Attain 10 years of auditing experience.
C) Practical experience.
D) Cease holding positions which might call into question their independence.
E) Sever relationship with former employers.
Answer: B
Learning Objective: 11-02
Topic: IASC and IASB―Developers of standards
Difficulty: 1 Easy
Blooms: Remember
AACSB: Ethics
AACSB: Diversity
AICPA: BB Global
AICPA: BB Legal