Quiz
ACC341 - Topic 5
Fragen in diesem Quiz (5)
1Which of the following is not a rationale for regulating financial accounting information?
- ATo protect users from fraudulent or misleading information.
- BA market for information without regulation is inefficient, and may result in the production of a sub-optimal amount of information.
- CTo assist management with better information, and to provide reports for use by management and parties within the organisation.
- DTo ensure equal access to information by all interested parties, including those that have limited power to demand it.
2Which theoretical perspective suggests that where firms are able to choose accounting methods, they will choose those that best reflect their economic performance?
- AOpportunistic perspective
- BEfficiency perspective
- CCreative accounting perspective
- DEconomic interest perspective
3According to some free-market theorists, there are private economics-based incentives for the organisation that will ensure that credible information will be provided. Which of the following assumptions is not consistent with this?
- AManagers will provide true and correct information for fear of not being rewarded, or fired for not doing so.
- BShareholders will assume managers will act opportunistically and so, in the absence of safeguards, will pay less for shares.
- CLenders will price protect, in that the higher the preserved risk, the higher will be the cost of loan funds demanded.
- DAll of the given options are correct.
4Which of the following assumptions of the market for corporate takeovers can be criticised for being unrealistic in practice?
- AAn under-performing firm will be taken over by another firm, which will then subsequently replace the current management team.
- BManagers will be motivated to maximise the firm's value to minimise the likelihood that outsiders could seize control.
- CManagement will know the marginal cost and benefit involved in producing the optimum amount of information required to minimise the firm's cost of capital.
- DAll of the given options are correct.
5Which of the following was not one of the pieces of evidence put forward by Walker (1987) to argue that the ASRB had been captured by the accounting profession?
- AThe accounting profession's AARF proposals for standards were fast-tracked, but more stringent requirements were in place for others.
- BThe profession influenced new appointments to the AASB so that, after just 2 years, virtually all members had some community of interest with the professional accounting bodies.
- CThe whole of AARF was merged with the AADB in 1987.
- DBy the beginning of 1986, the accounting profession indirectly managed to influence the procedures, priorities and output of the AASB.
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- Quiz am ACC341 - Topic 5, erstellt von mentor am 15/09/2014.
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