Flashcards
Mid Sem Q's
Cards in this deck (41)
- 11. Which of the following is not an argument for regulation?Capital markets require information and therefore firms that do not supply it will be punished
- 21. The free market perspective of accounting regulation suggests that accounting informationShould be provided like any other good that is subject to demand and supply
- 31. Proponents of the free market approaches to accounting regulation use Adam Smith (1937) as a basis for support. Which of the following is not associated with Adam Smith’s writings on the workings of the free market?No government intervention is necessary as the free market can optimally allocate and distribute resources
- 41. Which of the following statements is true about the regulation of accounting practice in its early period of development?Accounting was largely determined by generally accepted practice
- 5Question 5 1. In applying the “market for lemons perspective” (Akerlof, 1970), which of the following incentives applies to bad news preliminary profit announcements, according to Skinner’s (1994) research:Managers make good news disclosures voluntarily but bad news when they are required by regulation
- 61. Normative accounting theories and research seek to:Prescribe particular approaches not driven by existing practices
- 71. A theory that predicts that if certain conditions are met then particular accounting practices will be observed, is an example of a:Positive accounting theory
- 81. Which of the following is not an example of a normative accounting theory or research?Capital markets based (security price) research
- 91. Which of the following statements is true about accounting measurements such as profits and assets?. They are subject to professional judgement
- 101. Which of the following best describes the process of Setting accounting standards?A political process where the constituency affected either socially or economically by a proposed AASB standard have influence on the final outcome
- 111. Which of the following is a valid argument EXPLAINING regulatory capture THEORY?The regulated are not independent from the regulator and therefore lack neutrality and freedom from bias
- 121. It is argued by the pro-regulation supporters that accounting information is a free or public good. What is the characteristic of a free or public good?It is a good or service that, once available, people can obtain or use without paying
- 131. What is the major difference between Islamic religion and Western accounting practices, which would make harmonisation of accounting standards difficult to achieve in Islamic countries?Islam prevents debt financing and the payment of interest
- 141. According to Violet (1983), accounting cannot be considered to be culture free. Which of the following does not explain what Violet means by this?since accounting is culturally determined, other cultural customs, beliefs and institutions influence it
- 151. What is the cause of differences between the reporting results by the same company in two different countries for the same set of transactions and period?Different accounting and reporting standards
- 161. Which of the following is not a characteristic of the Continental European model of financial accounting and its regulation?Its reliance on qualitative requirements such as true and fair rather than accounting rules
- 171. Which of the following of Hofstede’s societal value dimensions addresses the dimension of how a society handles inequities among people when they occur?Large versus small power distance
- 181. Which of the following is not a characteristic of the Anglo-American model of financial accounting and its regulation?Regulation tends to be rule based rather than requiring professional judgement
- 191. Which of the following does not constitute one of Grey’s accounting values in the accounting subculture, which he identified after closely considering Hofstede’s societal values?Individualism versus collectivism
- 201. Hofstede (1980) defined culture as:. The collective programming of the mind which distinguishes the members of one human group from another
- 211. In addition to investigating the information content of earnings announcements, capital markets research has also considered whether:Earnings announcements reflect information previously utilised by investors
- 221. The book value is generally less than the market value of a firm because:Certain intangibles may not meet the asset recognition criteria
- 231. Semi-strong-form market efficiency suggests security prices will change when:Unexpected earnings results are announced
- 241. Capital markets research assumes that markets are:1. Capital markets research assumes that markets are:
- 251. Which of the following statements is true?Capital markets research assesses the aggregate effect of financial reporting, while behavioural research analyses individual responses to financial reporting
- 261. Recent capital markets studies have:Suggested capital markets are less efficient than previously believed
- 271. To test whether accounting information is useful, researchers such as Ball and Brown tested whether share prices responded to:Unexpected earnings announcements
- 281. Given efficient markets, the disclosure of favourable new information about a firm would be evidenced by:A share price increase
- 291. According to the findings of capital markets research, historic cost earnings information is:Useful to investors
- 301. Which of the following statements is true of normative accounting theories:a. Normative theories can prescribe how intangibles should be recognized and valued for reporting purposes
- 312. During the early development and regulation of accounting practice:a. Generally accepted accounting practice largely governed the preparation of accounting reports
- 323. Which of the following statements is false in relation to US Generally Accepted Accounting principles (US GAAP):a. US GAAP are rules-based standards established by the FASB and SEC
- 334. Which of the following statements is consistent with the semi-strong form of market efficiency:a. Investors are unable to beat the market by analysing the information contained within a companies financial statements or price trends
- 345. The work of Grady (1965), which formed the basis of APB Statement No.4, was based on observations and reflected the generally accepted accounting principles of the time. This work is an example of what type of theory or research?a. Positive accounting theory
- 356. Free market advocates argue that:a. Regulation can restrict the accounting methods used by some organisations even if they best reflect their particular performance and position
- 367. Ball (2006) argues that adoption of IFRS will not necessarily lead to a standardisation in accounting practice. What argument supports this view?a. The IASB has no ability to enforce the application of its accounting standards
- 378. In investigating the usefulness of accounting earnings, Ball and Brown (1968) found that:a. The direction of unexpected earnings changes is positively related to the direction of abnormal share price returns
- 389. According to Popper (1968) and other falsificationists:a. Where evidence supports a theory it might be said that it is the best theory currently available
- 3910. Which of the following is a valid perspective of economic interest group theory:b. Regulation is introduced to serve the private interests of particular parties
- 4011. Accountants exercising professional judgement in determining whether to understate or overstate forecast earnings illustrate which of Gray’s 4 accounting values:a. Conservatism versus optimism
- 4112. Capital markets research has suggested that:a. Voluntary disclosures have benefits in capital markets such as reduced cost of equity capital
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- Bachelors Degree Accounting Theory Flashcards on Mid Sem Q's, created by Nicholas Rossi on 12/04/2016.
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- Nicholas Rossi · Apr 2016
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- May 28, 2016
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