Ch 1 + 2 IFRS Insights

Question 0

IFRS and IASB

Answer 0

International Financial Reporting Standards

International Accounting Standards Board

Question 1

4 reasons to develop one set of international financial accounting standards?

Answer 1

1 multinational corporations
2 mergers and acquisitions btw international companies
3 information technology is improving intl communication
4 financial markets, global currency, equity, bond and derivative markets exist throughout the world

Question 2

GAAP and IFRS standard setting are primarily driven by?

Answer 2

Investors and creditors

Question 3

Compared to the GAAP, IFRS is more..

Answer 3

Principles based standards, while the GAAP is more

rules based standards

Question 4

What does the SEC allow foreign companies to do?

Answer 4

The SEC allows foreign companies to trade shares in
US markets by filing their IFRS financial statements
Without reconciliation of GAAP

Question 5

2 organizations that have a role in international standard

Setting?

Answer 5

International Organization of Securities Commissions (IOSCO)

And IASB

Question 6

3 Main standards of the International Organization of
Securities Commissions (IOSCO)?

Answer 6

Ensuring global markets can operate In An efficient and
Effective basis

Promote regulation and surveillance of intl securities transactions

Provide enforcement against offenses

Question 7

IOSCO Memorandum of understanding (MOU) 4 objectives?

Answer 7

1 Facilitates cross border cooperation

2 reduces global systemic risk
3 protects investors
4 ensures fair and efficient securities markets

Question 8

4 organizations that set standards internationally?

Answer 8

1 IASB,
2 Standards Advisory Council,
3 International Financial Reporting Interpretations Committee (IFRIC),
4 International Accounting Standards Committee Foundation (IASCF)

Question 9

What do the trustees of the International Accounting Standards Committee Foundation (IASCF) do?

Answer 9

Select members of the IASB and Standards Advisory Council,
Fund their activities and generally oversee the IASB’s
Activities

Question 10

Mission of the IASB?

Answer 10

Develop in the public interest a single set of high-quality
And understandable general purpose IFRS financial
statements

Question 11

Standards Advisory Council (SAC) functions?

Answer 11

SAC consults with IASB on major policy and technical issues

And helps select task force members

Question 12

International Financial Reporting Interpretations Committee (IFRIC) main purpose?

Answer 12

IFRIC develops implementation guidance for consideration
By IASB

Issues International Financial Reporting Interpretations that are considered authoritative and must be followed

Question 13

Major difference between IASB and FASB?

Answer 13

IASB has 14 members, which is twice as many as FASB

This reflects a broader need for geographic representation

Question 14

3 major types of pronouncements issued by IASB?

Answer 14

1 international financial reporting standards
2 framework for financial reporting
3 international financial reporting interpretations

Question 15

The hierarchy of rules in IFRS?

Answer 15

1 international reporting financial standards

2 international accounting standards

3 interpretations from the IFRIC or the former SIC

Question 16

The authoritative status of the Framework for the Preparation and Presentation of Financial Statements is as follows?

Answer 16

Used when there is no standard or interpretation related

To the reporting issues under consideration