Deck 3: International Accounting

Question 1

Discuss the Short-term International Convergence Project

Answer 1

The goal of the FASB's Short-term International Convergence Project is to remove a variety of individual differences between U.S.GAAP and International Financial Reporting Standards that are not within the scope of other major projects.The project's scope is limited to those differences in which convergence around a high-quality solution would appear to be achievable in the short term,usually by selecting between existing IFRS and U.S.GAAP. The FASB intends to analyze each of the differences within the scope and either 1)amend applicable U.S.GAAP literature to reduce or eliminate the difference or 2)communicate to the IASB the Board's rationale for electing not to change U.S.GAAP.Concurrently,the IASB will review IFRS and make similar determinations of whether to amend applicable IFRS or communicate its rationale to the FASB for electing not to change the IASB's GAAP. The FASB originally set September 30,2004,as the target date for issuing final for issuing final statements covering some,if not all,of the identified differences.Later the target completion date was reset for December 2011,but many projects are still to be completed at the time this text was published.

Question 2

Discuss the role of The International Financial Reporting Interpretations Committee

Answer 2

The IASC originally did not issue interpretations of its standards,however,after noting criticism it began issuing interpretations of its standards,beginning in 1997. Later the IASB established the International Financial Reporting Interpretations Committee IFRIC). The role of the IFRIC has evolved and was clarified by the publication of the IFRIC handbook in 2007.The IFRIC is comprised of twelve members,appointed by the trustees of the IASB for renewable terms of three years.The trustees appoint a member of the IASB,the director of technical activities or another senior member of the IASB staff,or another appropriately qualified individual,to chair the committee.The chair has the right to speak about the technical issues being considered but not to vote.The trustees also may appoint as nonvoting observers representatives of regulatory organizations,who have the right to attend and speak at meetings. The committee a)interprets the application of International Accounting Standards IASs)and International Financial Reporting Standards IFRSs)and provides timely guidance on financial reporting issues not specifically addressed in IASs and IFRSs,in the context of the IASB Framework,and undertakes other tasks at the request of the IASB; b)in carrying out its work under a)above,it must have regard to the IASB's objective of working actively with national standard setters to bring about convergence of national accounting standards and IASs and IFRSs to high-quality solutions; c)publish after clearance by the IASB the draft Interpretations for public comment and consider comments made within a reasonable period before finalizing an Interpretation; and d)report to the IASB and obtain its approval for final Interpretations.

Question 3

Which of the following is not a qualitative characteristic contained in the IASB's Framework for the Preparation of Financial Statements?

A)Understandability
B)Timeliness
C)Relevance
D)Reliability

Answer 3

B

Question 4

Which of the following bodies has the responsibility to issue international financial reporting standards IFRS)

A)The International Financial Reporting Interpretations Committee
B)The International Standards Advisory Council
C)The IASC Foundation
D)The International Accounting Standards Board

Question 5

How many trustees serve on the IASC Foundation?

A)16
B)18
C)20
D)22

Question 6

What is the objective of the joint FASB-IASB Convergence Project?

Question 7

What is the title of the form that foreign companies have used to reconcile their financial statements to U.S.GAAP?

A)Form 10-K
B)Form 10-Q
C)Form SX
D)Form20-F

Question 8

Which of the following is not an element of financial statements contained in the IASB's Framework for the Preparation of Financial Statements?

A)Gain
B)Income
C)Expense
D)Asset

Question 9

Discuss the IASB's annual improvements project..

Question 10

Which of the following is not an environmental factor that could impact on the development of a country's accounting system?

A)Level of education\
B)Political system
C)Geographic location
D)Legal system

Question 11

Which of the following is seen as a pervasive difference between IASB's and FASB's Conceptual Frameworks?

A)Definition of elements
B)Number of qualitative characteristics
C)Scope of authority
D)Level of detail

Question 12

What is the current acronym for the body most responsible for issuing international accounting standards?

A)IASB
B)SEC
C)FASB
D)IASC

Question 13

Which of the following concepts is contained in the FASB's conceptual framework but not in the IASC's

A)Expense
B)Comprehensive income
C)Asset
D)Liability

Question 14

How does the IASC enforce its standards?

A)Through ,the International Organization of Securities Commission
B)Through the concept of best endeavors
C)Through the Securities and Exchange Commission
D)Through the Financial Accounting Standards Board

Question 15

What is the purpose of the International Accounting Standards Board?

Question 16

What is the name given to the agreement between the FASB and IASC to harmonize accounting standards?

A)The Norwalk Agreement
B)The London agreement
C)The Washing ton D C agreement
D)The Paris Accords

Question 17

Discuss the environmental factors that impact on the development of a country's accounting system.

Question 18

Under rules enacted prior to 2007,how could a foreign company list its securities for sale in U.S.capital markets? How did this rule change?

Question 19

Which of the following is not a use of international accounting standards?

A)As national requirements.
B)As standards to be violated to improve intercountry comparability.
C)As an international benchmark for those countries that develop their own requirements.
D)By regulatory authorities for domestic and foreign companies

Question 20

How many members serve on the IASB?

A)16
B)18
C)20
D)22

Question 21

Discuss the elements of financial statements defined by the IASB's Framework for the Preparation of Financial Statements.

Question 22

Discuss the concepts of capital and capital maintenance discussed in the Framework for the Preparation of Financial Statements.

Question 23

Discuss the qualitative characteristics of accounting information as defined by the IASB's Framework for the Preparation of Financial Statements.