Question 1

The case that deals with conflicts between management and the board of directors and the role of family members in various business entities is:

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Question 2

It has been said that there is more conformity in international auditing standards around the world than on international financial reporting standards.Why do you think this may be the case?

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Question 3

The trigger event that led to the disclosure of the scandal at Parmalat was:

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Almost €4 billion of company funds that were supposed to be held in an account at Bank of America did not exist, which led to the discovery of a vast accounting fraud at Parmalat. This disclosure caused the company's stock to plummet and the subsequent investigation revealed that the company had been artificially inflating its revenue and profits for years.

Question 4

The primary accounting issue in the Royal Dutch Shell case is:

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The primary accounting issue in the Royal Dutch Shell case is the failure to adhere to SEC rules and the accounting for proved reserves. Shell overstated its oil reserves for several years, which resulted in restatements and settlements with the SEC and shareholders. While there were other issues with the company's accounting and compliance, they were not as central to the case as the reserve overstatements.

Question 5

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?

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Question 6

Compare and contrast corporate governance provisions in the U.S.with those in Germany? Where differences exist, evaluate whether you think the U.S.system is preferable or the German system.

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Question 7

Explain why you think the authors of studies cited in the text were concerned about whether a principles-based approach to standard setting might lead to earnings management.

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Question 8

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.

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Question 9

From a U.S.perspective, are there any concerns that regulators and standard setters should have about moving towards the adoption of IFRS in the U.S.? Why are they concerns?

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Question 10

In China and India different ownership groups often play a role much more important than these groups play in the U.S.Describe the different ownership patterns in China and India.Why do you think these groups have a larger role to play? Are there any concerns about the fact that they play such a larger role?

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Question 11

Consider the discussion in the chapter about establishing one set of accounting standards and comment on whether you think there should be one set of educational standards for accounting students at educational institutions in countries that comply with IFRS.Should there be a uniform CPA (Chartered Accountants) Exam for all such students? Why or why not?

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Question 12

Explain the role of ethics and virtue-based principles in evaluating whether financial information faithfully represents economic phenomena.

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Question 13

The Bat-A-Bing case deals with which of the following accounting issues.

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Question 14

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?

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Question 15

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

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Each of the charges made against Siemens in the SEC v. Siemens Aktiengesellschaft case included A, B, and D, but not C. The charges included that the Board failed to ensure compliance with U.S. regulatory and anti-bribery provisions, failed to meet obligations with compliance procedures, and created a corporate culture that encouraged bribery. However, there was no charge that the Board failed to adequately supervise auditors.

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