2018, June

Question 1

What is the difficulty in reconciling faithful representation to relevance to decision making when applying the conceptual framework?

Question 2

What are the factors that make the stakeholder theory incompatible with agency theory?

Question 3

Discuss and exemplify the different varieties of natural capital and how they add value to a business.

Question 4

A) When is it appropriate to report results under CPP rather than historical cost?

B) When is it appropriate to report results at fair value rather than at historical cost?

C) Under which valuation systems does provision for backlog depreciation arise and what would be the relevant journal entries to record it?

Question 5

Explain the fraud triangle and how it differs from the elements of the crime of fraud that a prosecutor would have to demonstrate in order to secure a conviction.

Question 6

Explain how the efficient markets hypothesis is relevant to accounting.

Question 7

I bought shares in DF at 5.35 two months ago.

They are down to 3.45 today after announcing poor profits.

My broker has rung just now to say do not sell because DF will be taken over very soon at 5.15 a share or more.

If I act on my broker’s advice, I am under which heuristic?

A) anchorage and adjustment

B) availability

C) representativeness

Question 8

Under CCA the value of assets is ideally an estimate of;

A) replacement price

B) deprival value

C) exit value

Question 9

The higher a firm’s beta;

A) the lower its ERC

B) the higher its ERC

C) the ERC is unaffected

Question 10

If firms become more like each other because they agree on a common way of doing things over time, the type of isomorphism involved is;

A) coercive

B) mimetic

C) normative

Question 11

Under integrated accounting, manufactured capital is most like what in traditional accounting?

A) fixed assets

B) share capital and reserves

C) working capital

Question 12

Technical insolvency is;

A) inability to pay debts in full

B) inability to pay debts as they fall due

C) inability to pay debts from liquid assets

Question 13

Good corporate governance requires;

A) a financially literate audit committee chair

B) non-remunerated executive directors

C) related party transactions

Question 14

The international fair value standard is;

A) IFRS 3

B) IFRS 13

C) IAS 9

Question 15

Client confidentiality is a duty of the professional accountant except;

A) when no such undertaken has been given in writing

B) when the accountant suspects wrongful conduct

C) when the ATO demands it to be overridden

Question 16

Which of the following is ordinal scaled?

A) Tennis scores such as 30 Love within a game

B) Quiz scores which include minus 5 for wrong answers

C) Exam marks after scaling down to a maximum of 60

Question 17

Fact or opinion?

The distance from the Earth to the Sun is one Astronomical Unit.

Question 18

Fact or opinion?

Goodwill arising on consolidation must be a positive number.

Question 19

Fact or opinion?

Only people who do not study fail this exam.

Question 20

Fact or opinion?

China will put someone on Mars before the other countries.

Question 21

Fact or opinion?

It is profitable to take advantage of RTZ’s 1 for 6 rights issue.

Question 22

Fact or opinion?

Russia had no influence on the last American election.

Question 23

Fact or opinion?

Increased consumer sales generally lead to increased stock market values.

Question 24

Fact or opinion?

The information content is only indirectly measurable from the ERC.

Question 25

Fact or opinion?

There are more shootings of schoolchildren where guns are illegal than in the USA.

Question 26

Fact or opinion?

The Crimea is part of Russia.