International Accounting Standards Board (IASB)

Question 1

International Standards Committee (IASC) was the organization that was the predecessor to the IASB.

Answer 1

True

Question 2

The IFRS Interpretations Committee serves a similar role as the Emerging Issues Task Force.

Answer 2

True

Question 3

The IASB Board members are elected into their positions.

Answer 3

False

Question 4

The IFRS Foundation is the parent to the IASB.

Answer 4

True

Question 5

The IASB has enforcement power.

Answer 5

False

Question 6

Who is responsible for fund raising for entire operations involving the IASB?

Answer 6

IFRS Foundation

Question 7

The IFRS Foundation serves as the administrative umbrella for a group of bodies.What bodies are included under the IFRS Foundation umbrella?

Answer 7

International Accounting Standards Board
IFRS Interpretations Committee
IFRS Advisory Council

Question 8

What are roles of the trustees of the IFRS Foundation?

Answer 8

Appoint the members of the IASB and establish their contracts of service and performance criteria.

Appoint the members of the IFRS Interpretations Committee and the IFRS Advisory Council.

Approve the annual budget of the IFRS Foundation and determine the basis for funding.

Question 9

What is an objective of the IFRS Foundation?

Answer 9

To take account of, as appropriate, the needs of a range of sizes and types of entities in diverse economic settings.

Question 10

SME reporting under IFRS requires more extensive disclosures.

Answer 10

False

Question 11

A Small and Medium-sized (SME) company can apply the IFRS SME standards and be publicly traded.

Answer 11

False

Question 12

U.S. GAAP requires more professional judgment than application of IASB Standards.

Answer 12

False

Question 13

International Financial Reporting Standards (IFRS) is the highest authority in the IFRS hierarchy.

Answer 13

True

Question 14

The due process for setting international accounting standards is very similar to the U.S. approach for setting U.S. standards.

Answer 14

True

Question 15

What are the IASB’s due process procedures?

Answer 15

Per the IASB Due Process Handbook:

1) Add the item to the Working Agenda
2) Discuss the issue
3) Prepare the Discussion Paper
4) Publish the discussion paper
5) Issue the Exposure Draft
6) Analyze comments to the Exposure Draft and
7) Issue the IFRS

Question 16

Examples of the term “public accountability” according to IFRSs and IFRS for SME?

Answer 16

I. Entity files, or is in the process of filing, its financial statements with a securities commission or other regulatory organization for the purpose of issuing any class of instruments in a public market.

II. Entity holds assets in a fiduciary capacity for a broad group of outsiders, such as a bank, insurance entity, securities broker/dealer, pension fund, mutual fund, or investment banking entity.

Question 17

According to the IFRS for Small and Medium-sized Entities (IFRS for SMEs), the intended user is an SME. What can be included in the definition of that user?

Answer 17

1) An entity that does not have public accountability.

2) An entity that publishes general purpose financial statements for external users.

Question 18

IAS 8, Accounting Policies, Changes in Accounting Estimates, and Errors includes the IFRS hierarchy. What is the second-level, or the level after the initial level, addressing the requirements and guidance in IFRS?

Answer 18

The definitions, recognition criteria, and measurement concepts for assets, liabilities, revenue, and expenses in the Framework.

Question 19

The U.S. Framework identifies accrual accounting as a basic assumption.

Answer 19

False

Question 20

The IASB Framework identifies accrual accounting as a basic assumption.

Answer 20

True

Question 21

The IASB Framework treats expenses and losses as an expense, where the U.S. Framework treats expenses and losses as separate elements.

Answer 21

True

Question 22

The U.S. Framework and International Framework both identify that the objective of financial reporting is to aid the external users decision making.

Answer 22

True

Question 23

To provide guidance in accounting for specific transactions, events or conditions is not a purpose of the IASB Framework.

Answer 23

True

Question 24

The purpose of IASB’s Framework for the preparation and presentation of financial statements includes:

Answer 24

Assist users of financial statements in interpreting the information contained in financial statements that are prepared in conformity with IFRSs.

Assist national standard-setting bodies in developing national standards.

Assist the IASB in the development of future IFRSs and in its review of existing IFRSs.

Question 25

When should an item that meets the definition of an element be recognized?

Answer 25

The item has a cost or value that can be measured reliably.

Question 26

What are underlying assumptions for the preparation and presentation of financial statements under the IASB Framework?

Answer 26

Accrual basis and going concern

Question 27

What are fundamental (primary) qualitative characteristic of useful financial information included in IASB’s Framework?

Answer 27

Relevance and Faithful Representation

Question 28

What are enhancing qualitative characteristics of financial information?

Answer 28

Comparability, understandability, and timeliness

Question 29

According to the IASB Framework, the process of reporting an item in the financial statements of an entity is:

Answer 29

Recognition

Question 30

According to the IASB Framework, an essential characteristic of an asset is that:

Answer 30

An asset provided future benefits.