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FAR6606D

aliyah hanani 15 questions

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Questions in this quiz (15)

  1. 1Theory of efficient markets

    Free market economists would argue that markets function best without government intervention, and that maximum efficiency is achieved by allowing forces of supply and demand to dictate market behaviour.

    What is one of the aims of government intervention?
    1. AA. Assist market development and promote economic growth
    2. BB. Markets lead by the capitalist
    3. CC. Opportunities only for established companies
  2. 2Theory of efficient markets

    ‘When the information is available to everyone, the information may be sold to certain people. Other people who did not pay for it cannot be easily excluded from using the information.’

    This phenomenon is referred to as ______?
    1. AA. Free-rider problem
    2. BB. Free-driver problem
    3. CC. Free-customer problem
  3. 3Theory of efficient markets

    Why does the regulatory board still be needed even though there is a free market for accounting information?

    I- Users are unable to agree on what they want
    II - Accountants will disagree on procedure to derive the information
    III- If the information of the company can be compared with others, the value of the information is greatly enhanced.
    1. AA. I and II
    2. BB. II and III
    3. CC. I and III
    4. DD. All of the above
  4. 4Agency Theory

    “To study contracts between principals and agents and to predict the economic consequences of standards” is a framework of
    1. AA. Theory of efficient markets
    2. BB. Agency theory
    3. CC. Theory of regulation
  5. 5Agency Theory

    Demand for stewardship information relates to the desire to :

    i- Motivate the agent
    ii- Distribute risk efficiently
    iii- To obtain power
    1. AA. i and ii
    2. BB. ii and iii
    3. CC. All of the above
  6. 6The theories of regulation relevant to accounting and auditing

    Which are the theories that are relevant to financial reporting?

    I. Theory of efficient market
    II. Agency theory
    III. Industrial theory
    IV. Theory of regulation
    1. AA. I and II
    2. BB. I, II and IV
    3. CC. II, III and IV
    4. DD. I, III and IV
  7. 7Theory of Regulation

    Which of the following theories are not included in the theories of regulation?
    1. AA. Regulation capture theory
    2. BB. Agency theory
    3. CC. Public interest theory
    4. DD. Private interest theory
  8. 8Public Interest Theory

    Government regulation is required in the ‘public interest’ whenever there is market failure (inefficiency) due to:

    I- lack of competition
    II- barriers to entry
    III- information asymmetry
    Iv- public-good products
    1. AA. I only
    2. BB. I, III and IV only
    3. CC. II and III only
    4. DD. All above
  9. 9Public Interest Theory

    One of the regulation relating to application of public interest theory is
    1. AA . The Sarbanes-Oxford Act (US, 2002)
    2. BB. Accounting Standards Review Board (AUS, 1984)
    3. CC. Malaysia Accounting Standard Board
  10. 10Private Interest Theory

    Choose the right statement
    1. AA. Private interest theorists believe there is a market regulation with different supply and demand forces operating as in the capital market.
    2. BB. The theory came out as a response to satisfaction with explanations provided by both the public interest and the capture theories.
    3. CC. George Stigler’s challenge were on the basic that governments have one basic resource which ‘is not shared even with citizens’ and regulatory activity reflects the relative political power of interest groups

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ANSWER ALL QUESTIONS TOPIC : APPLYING THEORY TO ACCOUNTING REGULATION
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