Exam 1: The Financial Reporting Environment

Which organization is responsible for promulgating U.S. GAAP?

Which of the following statements is false?

Both financial and governmental accounting standards are under the auspices of the Financial Accounting Foundation.

Accounting standards setters do which of the following?

Which of the following is not a reason why an accountant in the United States should learn international accounting standards?

When accountants work on the financial statements of U.S. companies with foreign subsidiaries prepared under IFRS in the home countries, the accountants do not convert the subsidiaries' financial statements to U.S. GAAP.

In recent years, the FASB standards that have been set indicate that the income statement is more important than the balance sheet.

The SEC permits the use of IFRS-based financial statements by international companies with shares trading on U.S. stock exchanges.

U.S. GAAP contains more rules-based standards than IFRS.

The FASB gives the SEC authority to regulate accounting for publicly traded companies.

The financial reporting process generates three basic financial statements.

Which of the following is not true of FASB?

The American Institute of Certified Public Accountants tests IFRS on the uniform CPA exam.

Which of the following statements correctly identifies accounting standard setters?

Managers of economic entities are best considered to be preparers of financial information.

Which of the following is not one of the four basic financial statements?

List the seven steps of the FASB standard-setting process.

Principles-based standards typically provide sufficient guidance to implement a standard.

Which regulatory body sets auditing standards and oversees the audits of public companies in the United States?

The demand for financial information is based on market factors.