Deck 2: International Accounting Patterns, Culture and Development

Question 1

One of Gray's accounting values is "secrecy versus statutory control."

Answer 1

False

Question 2

Individualism as a cultural value implies that

A) people have a preference for a loosely knit social framework in society.
B) people accept a hierarchical order.
C) people strive for power equalization and demand justification for power inequities.
D) people maintain a relaxed atmosphere in which practice counts more than principles and deviance is more easily tolerated.

Answer 2

A

Question 3

The Anglo culture areas can be contrasted with the Germanic culture areas.

Answer 3

True

Question 4

One of Hofstede's societal values is "uncertainty avoidance."

Question 5

Large power distance as a cultural value implies that

A) people have a preference for a loosely knit social framework in society.
B) people accept a hierarchical order.
C) people strive for power equalization and demand justification for power inequities.
D) people maintain a relaxed atmosphere in which practice counts more than principles and deviance is more easily tolerated.

Question 6

International classification should improve the understanding why some national systems have a dominant influence.

Question 7

One of Hofstede's societal values is "occupational specialization."

Question 8

Which of the following are cultural values developed by Hofstede?

A) professionalism.
B) statutory control.
C) power distance.
D) conservatism.

Question 9

The Mueller system of classifying countries for accounting purposes based on their business and economic environments is an example of

A) deductive classification.
B) inductive classification.
C) the inability to classify countries for accounting similarities.
D) cultural relativism.

Question 10

One of Gray's accounting values is "uniformity versus flexibility."

Question 11

The Nair and Frank approach to accounting classification

A) classifies countries according to economic similarities.
B) classifies countries according to cultural similarities.
C) is a good example of a deductive approach to classifying countries.
D) classifies countries according to similarities in measurement and disclosure practices.

Question 12

Small power distance as a cultural value implies that

A) people have a preference for a loosely knit social framework in society.
B) people accept a hierarchical order.
C) people strive for power equalization and demand justification for power inequities.
D) people maintain a relaxed atmosphere in which practice counts more than principles and deviance is more easily tolerated.

Question 13

Which of the following accurately reflects the status of research in the classification of countries in terms of accounting practices?

A) the deductive approach is superior to the inductive approach.
B) the inductive approach focuses too much on environmental factors rather than accounting practices.
C) narrow country groupings are possible due to advances in research methodology.
D) only very general relationships between environmental factors and accounting systems have been established.

Question 14

According to the inductive approach to accounting classification,

A) accounting practices are analyzed and used to develop accounting groups.
B) international accounting groups are developed by linking environmental factors to national practices.
C) it is impossible to compare countries due to political differences.
D) Mueller classifies accounting systems into the following patterns: macroeconomic, microeconomic, independent discipline, and uniform accounting.

Question 15

Conversatism can be linked most closely with collectivism.

Question 16

Preference for secrecy is consistent with strong uncertainty avoidance.

Question 17

FEMA is deeply involved in the development of international business on global scale.
Multiple Choice

Question 18

The adaptive and inductive approaches have been used to classify accounting systems.

Question 19

The hypothetical classification for financial reporting developed by Christopher Nobes

A) is an inductive approach to classification.
B) is a hierarchical scheme of classification that distinguishes countries according to microeconomic and macroeconomic systems.
C) uses the Price Waterhouse data to group countries.
D) classifies countries according to measurement and disclosure practices.

Question 20

According to the deductive approach to accounting classification,

A) accounting practices are analyzed and used to develop accounting groups.
B) international accounting groups are developed by linking environmental factors to national practices.
C) it is impossible to compare countries due to cultural differences.
D) disclosure groups are not as significant as are measurement groups in classifying countries.

Question 21

Conservatism is more compatible with

A) individualism.
B) collectivism.
C) strong uncertainty avoidance.
D) optimism.

Question 22

Which of the following are accounting cultural values developed by Gray?

A) individualism.
B) large power distance.
C) masculinity.
D) professionalism.

Question 23

Large power distance is more compatible with which accounting value?

A) professionalism.
B) uniformity.
C) transparency.
D) none of the above.

Question 24

Which of the following accurately reflects German accounting?

A) Tax law is influential, because annual accounts are the basis for tax accounts.
B) The stock market is the major source of funding in Germany, so accounting reflects the needs of investors.
C) The Germans influenced the 4th Directive of the European Union through the introduction of the true and fair view.
D) German companies depart from historical cost through widespread use of current value accounting.

Question 25

The EU has embarked on a major program of harmonization that will coordinate all of the following except

A) accounting
B) company law
C) monetary systems
D) urbanization

Question 26

The concept of presenting a "true and fair view" of a company's financial statements depends heavily upon

A) professionalism.
B) uniformity.
C) Confucian dynamism
D) secrecy.

Question 27

Which of the following accurately reflects British accounting?

A) The company law in Britain is fairly narrow, because it only applies to companies listed on the London Stock Exchange.
B) There is significant influence by the accountancy profession and the stock exchange as compared with Germany.
C) The European Union has not had much of an influence on British accounting due to the primacy of the true and fair view.
D) The Accounting Standards Board is funded and controlled by the Ministry of Trade and Industry rather than the independent profession.

Question 28

Confucian dynamism is a cultural value which:

A) emphasizes a dynamic approach to business.
B) refers to a short-term versus long-term orientation to business.
C) a Chinese value adopted as a Chinese accounting principle.
D) is associated with a religious order in China.

Question 29

A major accounting value that relates to enforcement and authority of accounting systems is

A) statutory control.
B) secrecy.
C) optimism.
D) conservatism.

Question 30

Weak uncertainty avoidance as a cultural value implies that

A) people have a preference for a loosely knit social framework in society.
B) people accept a hierarchical order.
C) people strive for power equalization and demand justification for power inequities.
D) people maintain a relaxed atmosphere in which practice counts more than principles and deviance is more easily tolerated.

Question 31

Individualism is more compatible with which accounting value?

A) statutory control.
B) uniformity.
C) flexibility.
D) collectivism.

Question 32

Anglo-Saxon countries would tend to reflect which of the following accounting values?

A) transparency.
B) secrecy.
C) conservatism.
D) uniformity.

Question 33

In the United Kingdom,

A) the Company Law is only followed by listed companies.
B) the "true and fair view" had to be adopted by the British, even though that is not what they wanted.
C) there is no accounting standard setting board due to the strength of the profession.
D) the "true and fair view" represents a flexible approach.

Question 34

International forces for change:

A) directly affect accounting values
B) do not directly affect accounting values
C) directly affect accounting systems
D) do not directly affect physical environment factors

Question 35

According to the flexibility cultural value in accounting,

A) there is a preference for permitting governments to establish uniform, yet flexible, standards.
B) there is a preference for confidentiality and the restriction of disclosure of information.
C) firms tend to be more open and publicly accountable.
D) accountants are more concerned with the perceived circumstances of individual companies.

Question 36

A major accounting cultural value that relates to accounting measurement is

A) collectivism.
B) conservatism.
C) secrecy.
D) power distance.

Question 37

Germanic countries would tend to reflect which of the following accounting values?

A) optimism.
B) transparency.
C) flexibility.
D) secrecy.

Question 38

Which group is providing environmental impact guidelines for MNEs

A) NBA
B) ATF
C) OECD
D) AAA

Question 39

All of the following affect secrecy and transparency except

A) measurement of assets and profits
B) individualism and collectivism
C) power distance
D) uncertainty avoidance

Question 40

A major accounting cultural value that relates to accounting disclosure is

A) professionalism.
B) uniformity.
C) individualism.
D) transparency.

Question 41

In order to foster international economic and social development the OECD has issued

A) the General Agreement on Tariffs and Trade
B) the G7 accord
C) the Potsdam declaration
D) a Code of Conduct

Question 42

Which group is leading the effort to harmonize audit standards?

A) FASB
B) SEC
C) IFAC
D) AAA