Deck 4: International Accounting

Question 1

Which of the following is true of Hofstede's (1980)theory?

A) The theory was developed as part of the cross-cultural psychology literature, and therefore was not directly concerned with accounting
B) It detected four structural elements of culture which strongly affect known behaviour in work situations in organisations and institutions
C) It derived from data collected from a multinational corporation located in more than 50 countries
D) All of the given options are correct

Answer 1

D

Question 2

What is the cause of differences between the reporting results by the same company,in two different countries,for the same set of transactions and period?

A) Different underlying economic systems
B) Different accounting and reporting standards
C) Different accounting policy choice
D) All of the given options are correct

Answer 2

B

Question 3

Which of the following of Gray's accounting sub-culture values describes a preference for substance over legal form regulation?

A) Professionalism versus statutory control
B) Uniformity versus flexibility
C) Conservatism versus optimism
D) Secrecy versus transparency

Answer 3

A

Question 4

Which of the following of Hofstede's societal value dimensions is associated with societies that maintain a more relaxed atmosphere,in which practice counts more than principles and deviance is more easily tolerated?

A) Strong uncertainty avoidance
B) Collectivism
C) Small power distance
D) Femininity

Question 5

Which of the following does not constitute one of Grey's accounting values in the accounting sub-culture,which he identified after closely considering Hofstede's societal values?

A) Secrecy versus transparency
B) Uniformity versus flexibility
C) Conservatism versus optimism
D) Individualism versus collectivism

Question 6

Which of the following are influences on the nature of accounting practice in different countries?

A) Accidents in history, such as stock market crashes
B) Strength of the accounting profession
C) Religion
D) All of the given options are correct

Question 7

Which of the following is not a characteristic of the Continental European model of financial accounting and its regulation?

A) It has been strongly influenced by government and the banking sector
B) Its reliance on qualitative requirements, such as 'true and fair', rather than accounting rules
C) The strong association between accounting methods and tax rules that are in place
D) Information tends to be of the nature to protect creditors, rather than investors

Question 8

According to Gray (1988),the higher a country ranks in terms of uncertainty avoidance and power distance,and the lower it ranks in terms of individualism and masculinity,then the more likely it is to rank highly in terms of:

A) Optimism
B) Professionalism
C) Uniformity
D) Secrecy

Question 9

According to Nobes (1998),many of the factors that have been suggested as reasons for differences in accounting methods in different countries are inter-related.He divided these into two broad categories.What is one of these broad categories?

A) Cultural
B) Religious influences
C) The political system in place
D) Tax system that is in place

Question 10

Which of the following is not a characteristic of the Anglo-American model of financial accounting and its regulation?

A) It has been strongly influenced by professional accounting bodies rather than government
B) It emphasises the importance of capital markets as the main source of equity and debt
C) Regulation tends to be rule based rather than requiring professional judgement
D) It emphasises consideration of substance over legal form

Question 11

The type of business ownership and financing system,and the taxation system,influence the nature of accounting practice in different countries.Which of the following describes the institutional influence more conducive to the increasing scale of globalised business and development of international accounting standards?

A) Outsider systems, where finance is mainly provided by external shareholders, and where the tax system is separate form the accounting system
B) Insider systems, where finance is mainly provided by family owners, banks and government, and the tax system dominates the accounting system
C) Outsider systems, where finance is mainly provided by family owners, banks and government, and the tax system is separate from the accounting system
D) Insider systems, where finance is mainly provided by external shareholders, and where the tax system dominates the accounting system

Question 12

Which of the following of Hofstede's societal value dimensions addresses the dimension of how a society handles inequities among people when they occur?

A) Large versus small power distance
B) Individualism versus collectivism
C) Strong versus weak uncertainty avoidance
D) Masculinity versus femininity

Question 13

According to Gray (1988),the higher a country ranks in terms of individualism and the lower it ranks in terms of uncertainty avoidance and power distance,then the more likely it is to rank highly in terms of:

A) Optimism
B) Professionalism
C) Uniformity
D) Transparency

Question 14

Which of the following cultural characteristics is not consistent with communities that prefer information disclosures to be kept to a minimum:

A) Collective, rather than an individualistic approach
B) High preference for uncertainty avoidance
C) Low power distance
D) All of the given options are correct

Question 15

What is the major difference between Islamic religion and Western accounting practices which would make convergence of accounting standards difficult to achieve in Islamic countries?

A) The Islamic concept of stewardship is to God not the individual
B) Islam prevents debt financing and the payment of interest
C) Fundamental business ethics flow automatically from the religious practices rather than from codes of professional associations
D) The Islamic religion influences how people do business and make decisions

Question 16

According to Gray (1988),the higher a country ranks in terms of uncertainty avoidance and power distance,and the lower it ranks in individualism,then the more likely it is to rank highly in terms of:

A) Conservatism
B) Professionalism
C) Uniformity
D) Flexibility

Question 17

Which researcher argued that the value systems of accountants are derived from,and related to,societal values,and that these social values are also held by accountants at a sub-culture level,and therefore will impact on the development of national accounting systems over time?

A) Hofstede (1980)
B) Gray (1988)
C) Mueller (1968)
D) Perera (1989)

Question 18

Hofstede (1980)defined culture as:

A) An expression of norms, values and customs which reflect typical behavioural aspects
B) A system of individual values, customs and beliefs
C) The collective programming of the mind, which distinguishes the members of one human group from another
D) A system of societal or collectively-held values

Question 19

According to Violet (1983),accounting cannot be considered to be culture-free.Which of the following does not explain what Violet means by this?

A) Accounting is a social institution, and, as such, has integrated certain cultural customs and elements within it
B) Accounting is an independent component of culture
C) Accounting is a product of culture, and contributes to the evolution of the culture which employs it
D) Since accounting is culturally determined, other cultural customs, beliefs and institutions influence it

Question 20

Which of the following does not equate with Gray's hypothesised linkages between accounting values and accounting practice?

A) The higher the degree of optimism, as opposed to conservatism, the stronger the ties with traditional measurement practice
B) The higher the degree of uniformity, the lower the extent of professional judgment and the stronger the level of enforcement in applying rules and procedures
C) The higher the degree of secrecy preferred, the lower the amount of disclosure
D) The higher the degree of professionalism, the greater the degree of self-regulation and lower need for government intervention

Question 21

Which of the following is not an objective of IASB?

A) To develop, in the public interest, a single set of high quality, understandable and enforceable global accounting standards that require high quality, transparent and comparable information in financial statements and other financial reporting to help participants in the world's capital markets and other users make economic decisions
B) To promote the use and rigorous application of IASB standards
C) To take account of, as appropriate, the special needs of small and medium-sized entities and emerging economies
D) To provide financial support to countries adopting the IASB standards

Question 22

Which of the following is not necessarily a benefit of harmonisation and convergence?

A) Increased relevance, functionality and appropriateness for all countries
B) Improved understanding and interpretation of financial reports by users in different countries
C) Increased comparability and consistency
D) Lower preparation costs for companies that have to produce different financial reports in different countries

Question 23

Which of the following are obstacles that are not unique to international harmonisation of accounting standards?

A) Standards may be opposed due to their negative economic consequences on individuals or groups
B) Standards may lack relevance to the recipients that they are imposed upon
C) Differences of opinion as to who should have the authority and responsibility of setting accounting standards
D) All of the given options are correct

Question 24

The decision that Australia would adopt international accounting standards issued by the IASB was made by:

A) The Australian Accounting Standards Board
B) The Federal Government Treasurer
C) The Financial Reporting Council
D) The International Accounting Standards Board

Question 25

From a practical standpoint,what is the goal of accounting standards harmonisation or convergence?

A) Creating one set of standards used throughout the world
B) Reducing the conflict among national accounting standards
C) Producing accounting standards that are unique for each country
D) Forcing compliance with IASB regulations

Question 26

Which of the following is not true for the International Accounting standards and the International Financial Reporting Standards?

A) They are based on the legalistic approach
B) They provide choices in recognition and measurement of various accounting transactions
C) They incorporate 'uncertainty expressions' (such as 'probable', 'significant influence', 'control' and 'substantial')
D) They are based on the concept of presenting 'true and fair view' of a company's financial reports, where the professional accountants are given the right to use their judgment to accomplish this goal

Question 27

The process of adopting international accounting standards in Australia did not include:

A) An initial period of harmonisation where AASB standards were made to be compatible with IAS's, but with some divergence allowed where appropriate
B) A Corporate Law and Economic Reform Program (CLERP) Report, in 1997, outlining the rationale and benefits for Australia of adopting international accounting standards
C) A decision by the FRC in 2002 that Australia would adopt accounting standards issued by the IASNB, and no divergence was to be acceptable
D) Opposition from the Australian Stock Exchange

Question 28

From 2005,Australia has adopted the IASB standards for:

A) All the reporting entities
B) Multinational enterprises only
C) All the entities listed on the stock markets
D) All entities that prepare consolidated financial statements