Question 1

From March 2010, the principal objectives of the International Accounting Standards Board (IASB) include promoting the use and rigorous application of IFRSs and to bring about convergence of national accounting standards and IFRSs.

Accepted Answer

This statement accurately reflects the principal objectives of the IASB since March 2010.

Question 2

The Australian Securities and Investments Commission (ASIC) is responsible for monitoring and promoting market integrity and consumer protection in relation to the Australian financial system.

Accepted Answer

The statement is correct. The ASIC is Australia's corporate, markets, financial services regulator and consumer credit regulator. It aims to maintain and improve the performance of the financial system and to promote investor confidence in financial markets.

Question 3

The content and format of general purpose financial reports are determined by the company's management and the specific user group requiring the special purpose financial report.

Accepted Answer

The content and format of general purpose financial reports are primarily determined by accounting standards and regulatory bodies, not by the company's management or specific user groups requiring the report.

Question 4

The Australian Securities Exchange (ASX) played a major role in influencing the Australian Government to push the AASB towards the adoption of IASB standards.

Accepted Answer

The ASX publicly supported the adoption of IASB standards and played a role in lobbying the Australian Government to push for this change.

Question 5

In announcing that the AASB would adopt IASB accounting standards by 1 January 2005, the Financial Reporting Council (FRC) argued that a single set of high-quality accounting standards that are accepted in international capital markets would greatly help cross-border comparisons by investors.

Accepted Answer

The statement accurately reflects the FRC's reasoning for the adoption of IASB accounting standards by the AASB.

Question 6

Australian accounting standards are now identical to their equivalent International Financial Reporting Standards (IFRSs).

Accepted Answer

Australian accounting standards, while closely aligned with International Financial Reporting Standards (IFRSs), are not identical. The Australian Accounting Standards Board (AASB) has made certain modifications and adaptations to fit the Australian context.

Question 7

The Australian Securities and Investments Commission (ASIC) does not determine accounting standards, but has the right to lobby for or against accounting standards as it sees fit.

Accepted Answer

ASIC does not determine accounting standards, but it has the power to advocate for or against them as needed.

Question 8

The three main user groups of general purpose financial reports (GPFRs) contained in the Framework for the Preparation and Presentation of Financial Statements (the Framework) include the management of the reporting entity.

Accepted Answer

The three main user groups of GPFRs identified in the Framework are investors, creditors, and other lenders, not the management of the reporting entity. Management is considered a preparer of the reports, not a primary user group.

Question 9

As the Urgent Issues Group (UIG) is now defunct, the interpretations issued by it are no longer enforceable.

Accepted Answer

Although the Urgent Issues Group (UIG) is defunct, the interpretations issued by it remain in effect until they are specifically withdrawn or superseded by new standards or interpretations.

Question 10

Under the ASIC Act 2001 one of the key functions of the Australian Accounting Standards Board (AASB) is to participate in the development of a single set of accounting standards for worldwide use.

Accepted Answer

This statement is true as per section 225 of the ASIC Act 2001.

Quiz 1: Nature and Regulation of Companies