Deck 3: International Accounting

Question 1

Discuss the role of The International Financial Reporting Interpretations Committee

Answer 1

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 2

How many members serve on the IASB?

A)14
B)18
C)20
D)22

Answer 2

A

Question 3

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

Answer 3

Financial accounting is influenced by the environment in which it operates.Nations have different histories,values,cultures,and political and economic systems,and they are also in various stages of economic development.These national influences interact with each other and,in turn,influence the development and application of financial accounting practices and reporting procedures Level of Education There tends to be a direct correlation between the level of education obtained by a country's citizens and the development of the financial accounting reporting practices in that country.The characteristics comprising these environmental factors include 1)the degree of literacy in a country; 2)the percentage of the population that has completed grade school,high school,and college; 3)the orientation of the educational system vocational,professional,etc.); and 4)the appropriateness of the educational system to the country's economic and social needs.Countries with better educated populations are associated with more advanced financial accounting systems.Political System The type of political system socialist,democratic,totalitarian,etc.)can influence the development of accounting standards and procedures.The accounting system in a country with a centrally controlled economy will be different from the accounting system in a market-oriented economy.For example,companies in a socialist country may be required to provide information on social impact and cost-benefit analysis in addition to information on profitability and financial position.Legal System The extent to which a country's laws determine accounting practice influences the strengths of that country's accounting profession.When governments prescribe accounting practices and procedures,the authority of the accounting profession is usually weak.Conversely,the nonlegalistic establishment of accounting policies by professional organizations is a characteristic of common-law countries.Economic Development The level of a country's economic development influences both the development and application of its financial reporting practices.Countries with low levels of economic development will have relatively less need for a sophisticated accounting system than countries with high levels of economic development

Question 4

What is the purpose of the International Accounting Standards Board?

Question 5

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 6

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 7

How many trustees serve on the IASC Foundation?

A)14
B)18
C)20
D)22

Question 8

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

Question 9

Seven of the full-time members will be expected to have formal liaison responsibilities with national standards setters in order to promote the convergence of national accounting standards and the IAS.

Question 10

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 11

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 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 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 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

Discuss the Short-term International Convergence Project

Question 16

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

Question 17

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 18

Which of the following is not an environmental actor 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 19

Discuss the IASB's annual improvements project..

Question 20

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 21

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

Question 22

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 23

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

Question 24

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