Deck 26: International Accounting Standards, harmonisation and Convergence

Question 1

Place these steps in the development of an accounting standard by the IASB in the order in which they occur in practice.
I)Developing an exposure draft for public comment
Ii)Publishing a discussion paper for public comment
Iii)Establishing an advisory committee
Iv)Approval by the IASB

A) i, ii, iii, iv
B) iii, i, ii, iv
C) ii, iii, i, iv
D) iii, ii, i, iv

Answer 1

D

Question 2

Australia adopted international accounting standards:

A) on 30 June 2005
B) on 31 December 2005
C) on 1 January 2005
D) on 31 March 2005

Answer 2

C

Question 3

The primary benefit of harmonising financial reporting practices around the world is:

A) enhancing the attractiveness of exporting goods and services for smaller businesses
B) reducing the likely risks and costs of making transactions in different countries
C) eliminating the need for firms operating locally and in other countries to file detailed financial reports with regulatory authorities in other countries
D) that investors in international capital markets can make more reliable comparisons of the reports of different entities

Answer 3

D

Question 4

Discuss the significance of the Norwalk Agreement and the relationship between the IASB and various national standard setters.

Question 5

Which of these statements is not correct concerning the adoption by Australia of international accounting standards?

A) Where words need to be changed in AASB adaptations of international standards to accommodate Australian legislation, these are identified by the use of 'Aus' paragraphs
B) Australian standards, where there is no international equivalent, have been withdrawn
C) The AASB is committed to ensuring that AASB equivalents will be issued for all international accounting standards
D) None of the above, i.e., all are correct statements

Question 6

The 'global harmonisation' approach to accounting standards,as set out in AASB Policy Statement No 1,means:

A) working to reduce the differences between Australian and other countries accounting standards
B) adopting accounting standards developed and adopted in other countries
C) developing local accounting standards based on an examination of accounting standards and practices adopted in other countries
D) the adoption of a single set of accounting standards throughout the world

Question 7

Explain why the Australian Stock Exchange supports the adoption in Australia of a set of accounting standards developed by a body such as the International Accounting Standards Board.Discuss whether or not stock exchanges in other countries would also be likely to support the adoption of International Accounting Standards Board standards in their countries.

Question 8

The International Accounting Standards Board is:

A) an independent private sector body located in the United Kingdom
B) a joint body set up by the International Accounting Standards Committee and the International Organisation of Securities Commissions
C) a joint body established by the International Accounting Standards Committee and the United States Securities and Exchange Commission
D) based in London and is an agency of the United Kingdom government

Question 9

Describe and explain the strategies adopted by the AASB in order to achieve the objective of international harmonisation of accounting standards in Australia.

Question 10

International accounting standards are applicable:

A) only to for-profit entities in the private sector
B) to for-profit and not-for-profit entities and government business enterprises
C) to for-profit and not-for-profit entities but not to government business enterprises
D) to for-profit entities including government business enterprises

Question 11

Australia initially adopted the 'internationalisation' approach to setting accounting standards.This approach involves:

A) adopting accounting standards developed and adopted in other countries
B) developing local accounting standards based on an examination of accounting standards and practices developed outside Australia
C) the adoption by Australia and other countries of a single set of accounting standards for all countries
D) all of the above