Exam 1: The Economic and Institutional Setting for Financial Reporting

Which one of the following types of disclosure costs is the cost of disclosing the company's pricing strategies?

When earnings and share price fall below acceptable levels,dissident shareholders may launch a proxy contest to elect their own slate of directors at the next annual meeting.

Some countries' philosophy of financial reporting differs from GAAP because their financial reports are required to conform to tax law.

Some countries' philosophy of financial reporting differs from U.S.GAAP because their financial reports are required to

Foreign companies registered with the SEC that use IFRS no longer have to reconcile their financial statements to U.S.GAAP.

IFRS frequently

Taxing authorities sometimes use financial statement information as a basis for establishing tax rules to match accounting rules.

Compared to U.S.GAAP,IASB standard generally allow firms more latitude.

All financial statements:

Financial information capable of making a difference in a decision is relevant.

The best source of information about a company's current health and prospects for the future is the company's financial statements.

When a borrower violates a loan covenant that requires minimum achievement of an accounting measure in the financial statements,the lender can

Business enterprises enter into many different types of contracts.Examples of such contracts that often contain language that refers to verifiable financial statement numbers include all of the following except

The ability to raise additional cash by selling assets,issuing stock,or borrowing more is

In 2009,the FASB completed a five-year effort to distill the existing GAAP literature into a single database known as

The amounts of executive compensation and bonuses are often determined by

IFRS are

One financial disclosure cost is the possibility that competitors may use the information to harm the company providing the disclosure.All of the following disclosures might create a competitive disadvantage except

GAAP's goals are to ensure that financial statements

Because financial disclosures are regulated,owners and managers have little economic incentive to supply the amount and type of financial information that will enable them to raise capital most cheaply.