Question 1

Which of the following is an argument in favour of a GAAP body of knowledge that is more prescriptive, or rules-based?

Accepted Answer

A more prescriptive, rules-based approach can provide clear guidance on how to account for specific items, making it easier to defend accounting decisions. This can be especially important in situations where companies could potentially manipulate financial reporting if guidelines were too vague.

Question 2

One political factor influencing the standard setting process is how the standard-setting bodies are financed.Which of the following is NOT an IASB principle regarding the nature and amount of funding?

Accepted Answer

The IASB principles for funding emphasize broad-based support, compelling constituents to contribute, and sharing costs among major economies. They do not include making financial commitments contingent on specific outcomes, which would undermine the independence of the standard-setting process.

Question 3

The Sarbanes-Oxley Act (SOX)was NOT enacted to

Accepted Answer

The Sarbanes-Oxley Act (SOX) was primarily enacted to help prevent fraud and poor financial reporting practices, introduce new independence rules for auditors, and enable the SEC to increase its policing efforts. However, it was not enacted to ensure that the act was applied internationally. SOX primarily applies to publicly traded companies in the United States.

Question 4

Which of the following is likely to be an advantage of the advancement of technology on financial reporting?

Accepted Answer

The advancement of technology in financial reporting will likely result in users of financial information having access to more information, as technological advances allow for greater accuracy and timeliness in reporting financial information.

Quiz 1: The Canadian Financial Reporting Environment

Which of the following is an argument in favour of a GAAP body of knowledge that is more prescriptive, or rules-based?

One political factor influencing the standard setting process is how the standard-setting bodies are financed.Which of the following is NOT an IASB principle regarding the nature and amount of funding?

The Sarbanes-Oxley Act (SOX) was NOT enacted to

Which of the following is likely to be an advantage of the advancement of technology on financial reporting?