Question 1

From an accounting perspective,countries with strong equity markets and shareholder orientations tend to be ________.

Accepted Answer

Countries with strong equity markets and shareholder orientations typically have micro-based systems, which focus on providing detailed financial information to investors and other stakeholders.

Question 2

The accounting principle that relates to more,rather than less,extensive footnotes in reports is known as ________.

Accepted Answer

Transparency is the accounting principle that requires companies to provide all relevant information to their stakeholders so that they can make informed decisions. Extensive footnotes in financial reports are a way to increase transparency by providing additional details and explanations about the financial statements. Therefore, the principle that relates to more, rather than less, extensive footnotes in reports is transparency.

Question 3

At Cooper Industries,Jake is responsible for evaluating potential acquisitions abroad,managing cash flow,tax planning,and internal auditing.Which of the following is most likely Jake's position at Cooper?

Accepted Answer

D

Question 4

Which of the following statements is most likely true about secrecy and transparency in accounting?

Accepted Answer

Studies have found that German companies have a lower level of financial disclosure compared to British firms. This could be attributed to the more privacy-focused culture in Germany, as well as a lack of legal requirements for disclosure. Option A is not necessarily true, as the level of transparency can vary among Japanese firms. Option C is incorrect as secrecy and transparency in accounting usually refer to financial disclosure and reporting practices rather than asset valuation. Option D is not entirely accurate, as even listed companies can choose to disclose only the required minimum information in their financial statements.

Question 5

Which term refers to how companies value assets such as inventory?

Accepted Answer

The term that refers to how companies value assets such as inventory is measurement.

Question 6

The accounting value that illustrates how companies are more liberal in their recognition of income is ________.

Accepted Answer

The term "optimism" in accounting refers to a tendency for companies to be more liberal in their recognition of income, increasing the reported financial performance of the company. This is a subjective bias that can influence financial reporting.

Question 7

International accounting firms,such as Deloitte and KPMG,have the most influence on ________.

Accepted Answer

International accounting firms such as Deloitte and KPMG have significant influence on global auditing practices as they provide auditing services to multinational corporations and shape the development of international auditing standards. While they may have some influence on tax laws and public record disclosure rules, their primary area of influence is in the field of auditing. They do not generally have direct influence over domestic legal systems.

Question 8

A major reason for the Parmalat accounting scandal is that the firm ________.

Accepted Answer

The Parmalat accounting scandal involved the use of off-balance-sheet financing to hide debts, allowing the company to present a more favorable financial picture than was accurate. This deception ultimately led to the bankruptcy of the company. The other options (selling milk without a license, using U.S. GAAP instead of IFRS, and transferring assets to Swiss banks) were not major factors in the scandal.

Question 9

In which quadrant of a disclosure/assessment matrix for accounting systems would you most likely find less-developed Latin countries?

Accepted Answer

Less-developed Latin countries typically have lower levels of transparency and conservatism in their accounting systems, which would place them in the quadrant of conservatism and secrecy in a disclosure/assessment matrix.

Question 10

In addition to hiding losses,Parmalat engaged in financial statement fraud to ________.

Accepted Answer

Parmalat engaged in financial statement fraud to support family-owned businesses, as the company was controlled by the Tanzi family, who used the fraudulent activities to maintain control and support their interests.

Question 11

How would you classify the accounting values of companies from the United States and the United Kingdom in terms of their measurement and disclosure of financial information?

Accepted Answer

Companies from the United States and the United Kingdom are known for their transparent financial reporting practices. Additionally, U.S. accounting values can be characterized as optimistic, often reflecting a more positive outlook on future financial prospects, while U.K. values are typically more conservative, emphasizing prudence and caution in financial reporting.

Question 12

Which accounting systems are shaped more by government practice?

Accepted Answer

Macro-uniform accounting systems are shaped more by government practice as they are typically used by governments and government organizations to harmonize accounting practices and ensure consistency across different entities. These systems are often mandated by law, regulations or accounting standards set by government bodies, making them heavily influenced by government practice.

Question 13

Hoffman Electronics is a U.S.company.Which balance sheet format is most likely used by Hoffman?

Accepted Answer

The most commonly used balance sheet format in the U.S. is the assets = liabilities + shareholders' equity format, which is also known as the accounting equation. This format shows the company's total assets on one side and the sum of its liabilities and shareholders' equity on the other. Hoffman Electronics, being a U.S. company, is likely to follow this format.

Question 14

Larson Shoes is a British company.Which balance sheet format is most likely used by Larson?

Accepted Answer

The answer of Larson Shoes is a British company.Which balance...

Question 15

Suzanne,an investor,tends to invest in corporations that are headquartered in countries that value financial transparency.A firm based in which of the following countries would most likely appeal to Suzanne?

Accepted Answer

The answer of Suzanne,an investor,tends to invest in corporations that...

Question 16

The degree of caution companies display in valuing assets and recognizing income is known as ________.

Accepted Answer

The degree of caution companies display in valuing assets and recognizing income is known as conservatism.

Question 17

The financial reports and information provided by businesses is primarily used by all of the following EXCEPT ________.

Accepted Answer

Educators do not typically use financial reports and information provided by businesses. Investors, creditors, and lenders all use this information to make informed decisions.

Question 18

German companies like Deutsche Bank and Daimler Chrysler have been relatively optimistic and transparent in their financial reporting compared with many Germanic companies because ________.

Accepted Answer

Deutsche Bank and Daimler Chrysler adopted U.S. Generally Accepted Accounting Standards which are considered more transparent and precise compared to German accounting standards. This helps them to be relatively optimistic and transparent in their financial reporting.

Question 19

The accounting value that relates to issues such as how to present financial information and discuss financial results is known as ________.

Accepted Answer

Disclosure refers to the accounting value that deals with presenting financial information and financial results. Measurement is the value that relates to how financial transactions are recorded and reported. Conservatism and optimism are principles that affect the measurement and reporting of financial transactions, but they do not specifically relate to the presentation and discussion of financial information.

Question 20

Germany's accounting system has historically been a ________ system.

Accepted Answer

Germany's accounting system has typically been centered around legal requirements and standards, leading to a law-based system.

Quiz 19: International Accounting and Finance Issues