Advnced Financial Reporting Lecture 2

Question 1

Harmonisation

Answer 1

A process that attempts to make accounting standards, released by different coutnries, as similar as possible.

Question 2

2 Arguments in favour of harmonisation

Answer 2

1. Promotes the attraction of foreign capital
2. Domestic investor protection.

Question 3

2 Barriers to harmonisation

Answer 3

1. Effects on standard setting of different:
   -Business environments
   -Legal systems
2. IASs are strongly Anglo-American influenced

Question 4

Give me 5 international differences

Answer 4

1. Tax systems
2. Level of Education
3. Level of Economic development
4. Culture
5. History

Question 5

Six underlying societal dimensions

Answer 5

1. Individualism
2. Power distance
3. Uncertainty Avoidance
4. Masculinity
5. Long term Orientation
6. Indulgance

Question 6

Gray’s 4 accounting values

Answer 6

1. Professionalism versus statutory control
2. Uniformity versus flexibility
3. conservatism versus flexibility
4. Secrecy versus transparency.

Question 7

Positive accounting theory 3 areas to think about

Answer 7

1. Creative accounting
2. Capital market-based accounting research
3. Behavioural research in accounting

Question 8

3 Forms of Market Efficiency

Answer 8

1. Weak form
2. Semi-strong form
3. Strong form

Question 9

Behavioural research 5 main brancches

Answer 9

1. Managment control
2. Accounting information processing
3. Accounting information system design
4. Auditing process research
5. Organisational sociology.