Exam 1: The Financial Reporting Environment

Which party involved in the financial reporting process provides assurance that the financial statements prepared by management fairly present the financial position and performance of the company?

Which of the following types of information would be categorized as financial information?

Which of the following is a characteristic of rules-based standards?

Rules-based standards require a significant amount of professional judgment.

The Securities and Exchange Commission (SEC) regulates financial reporting for publicly traded companies.

The Private Company Council has authority to make the final decision about changing U.S. GAAP for private companies.

The FAF finances the FASB primarily by funds from the Public Company Accounting Oversight Board which assesses fees against companies that issue equity securities.

Fair value of an asset is the amount at which the asset could be bought in a current transaction between willing parties.

Which of the following user groups consist of companies that analyze financial information to identify the reporting entity's objectives, assumptions, overall business strategy, and capabilities?

Principles-based standards are more consistent with the asset/liability approach and rules-based standards are more consistent with the income statement approach.

Fair value measurements have a long-standing tradition in U.S. GAAP.

Which organization is responsible for the oversight, financing, and administration of all accounting standard setting organizations in the United States?

The FASB and the IFRS have been working together to converge U.S. and international standards to eliminate differences.

Which type of standard relies on theories and concepts that are linked to a well-developed theoretical framework?

Which element of financial accounting involves identifying the individuals who demand financial information?

The FASB Accounting Standards Codification is the single source of GAAP in the United States.

List four reasons why it is important for an accountant in the United States to learn international accounting standards.

The Public Company Accounting Oversight Board (PCAOB) sets financial accounting standards and oversees the audits of public companies in the United States.

Which of the following defines fair value?

Which organization prepares and grades the Uniform CPA Examination?