Standard Setting Flashcards
Which of the following statements regarding accounting theory is incorrect?
a. Accounting concepts are human-made
b. Accounting concepts are components of accounting theory
c. Accounting theory has developed primarily in response to government regulations
d. Accounting theory can be defined as coherent set of hypothetical, conceptual and pragmatic principles that form a general frame of reference for a field of inquiry
c. Accounting theory has developed primarily in response to government regulations
It is a memorandum of agreement made between IASB and FASB (US) and signed in Norwalk Connecticut, USA with the goal of achieving comparability in financial reporting standards by eliminating or minimizing differences between IFRS and US GAAP
a. The Convergence Covenant
b. The IASB-FASB Pact
c. The Norwalk Agreement
d. The Reporting Standard Treaty
c. The Norwalk Agreement
The name that is presently used for standards issued by the International Accounting Standards Board is
a. International Accounting Standards (IAS)
b. International Financial Reporting Standards (IFRS)
c. International Financial Accounting Interpretation (FAI)
d. International Generally Accepted Accounting Principles (IGAAP)
b. International Financial Reporting Standards (IFRS)
Which of the following organizations is responsible for setting International Fiancial eporting Standards?
a. Financial Accounting Committee
b. Financial Accounting Standards Board
c. International Accounting Standards Board
d. International Accounting Standards Committee
c. International Accounting Standards Board
Which of the following is not directly involved in accounting standard-setting “due process” on the Philippines?
a. Board of accountancy
b. Bureau of internal revenue
c. Professional regulations commission
d. Financial reporting standards council
b. Bureau of internal revenue
The process of establishing financial accounting standards
a. Is legislative process based on rules promulgated by government agencies
b. Is based solely on economic analysis of the effect each standard will have if it is implemented
c. Is a democratic process in that a majority of practicing accountants must agree with a standard before it becomes implemented
d. Is a social process which incorporates political actions of various interested user groups as well as professional research and logic
Is a social process which incorporates political actions of various interested user groups as well as professional research and logic
Which is not part of the financial reporting standard setting process in the Philippines?
a. Publication in the PRC Official Gazette and in newspaper of general circulation
b. Distribution of the exposure draft for comment to CPA professionals and other interested parties
c. Creation of a task force by the standard setting body to study the proposed accounting standard
d. Approval by Financial Reporting Standards Council (FRSC) and eventually by Professional Regulations Commission (PRC)
a. Publication in the PRC Official Gazette and in newspaper of general circulation
Which of the following is not a description or a function of the Financial Reporting Standards Council (FRSC)?
a. It establishes generally accepted accounting principles in the Philippines
b. It receives financial support principally from the Professional Regulations Commission (PRC)
c. It is the successor of Accounting Standards Council (ASC) and the creator Philippine Interpretations Committee (PIC)
d. It assists the Professional Regulatory Board of Accountancy (BOA) in carrying out its power and function to promulgate accounting standards in the Philippines
b. It receives financial support principally from the Professional Regulations Commission (PRC)
The International Accounting Standards (AIS) are
a. Focused on quantitative rules
b. Based on regulations not concepts
c. Principles –based rather than rules-based
d. Rules-based rather than principles based
c. Principles –based rather than rules-based
The purpose of the International Financial Reporting Standards (IFRS) is to
a. Promote uniform accounting standards among the countries of the world
b. Arbitrate accounting disputes between auditors and international entities
c. Issue enforceable standards which regulate financial reporting of multinational entities
d. Develop a uniform currency in which the financial transactions of entities throughout the world would be measured
a. Promote uniform accounting standards among the countries of the world
Determine the true statement regarding IFRS wen referred collectively
a. The term “AIS” generally covers “IFRS”
b. The term “AIS” generally covers “IFRIC”
c. The term “IFRS” generally covers “AIS”
d. The term “IFRIC” generally covers “IFRS”
c. The term “IFRS” generally covers “AIS”
International Financial Reporting Standards are applicable to the following entities:
a. Not-for-profit entities
b. Government entities
c. Government business enterprises
d. Public sector not-for-profit organizations
c. Government business enterprises
Generally accepted accounting principles
a. Rarely change
b. Define accounting practice at a point in time
c. Are not affected by changes in the way business operate
d. Are similar in nature to the principles of chemistry or physics
b. Define accounting practice at a point in time
Generally accepted accounting principles
a. Derive their authority from legal court proceedings
b. Have been specified in detail in the FRSC Conceptual Framework
c. Are fundamentally truths or axioms that can be derived from laws of nature
d. Derived their credibility and authority from general are recognition and acceptance by the accounting profession
d. Derived their credibility and authority from general are recognition and acceptance by the accounting profession
To qualify as generally accepted, accounting principle must
a. Receive substantial authoritative support
b. Guide entrepreneur of the choice of an accounting entity like a sole proprietorship, partnership or corporation
c. Usually guide corporate managers in preparing financial statements, which will be understood by widely scattered stockholders
d. Guide corporate managers in preparing financial statements, which will be used for collective bargaining agreements with trade unions
a. Receive substantial authoritative support
