Question 1

Some of the perceived barriers to the harmonisation process (for the harmonisation of accounting standards globally)include:

Accepted Answer

A)  different business environments. 
B)  different legal systems. 
C)  different cultures. 
D)  all of the given answers. 
A)  different business environments. 
B)  different legal systems. 
C)  different cultures. 
D)  all of the given answers.

Question 2

The functioning of the Auditing and Assurance Standards Board is overseen by:

Accepted Answer

A)  the Australian Accounting Research Foundation. 
B)  the Australian Accounting Standards Board. 
C)  the Financial Reporting Council. 
D)  the International Accounting Standards Board. 
A)  the Australian Accounting Research Foundation. 
B)  the Australian Accounting Standards Board. 
C)  the Financial Reporting Council. 
D)  the International Accounting Standards Board.

Question 3

The only body with the power to veto a standard recommended by the AASB is:

Accepted Answer

A)  the Financial Reporting Council. 
B)  the Commonwealth Parliament. 
C)  the Australian Accounting Standards Review Board. 
D)  the Urgent Issues Group. 
A)  the Financial Reporting Council. 
B)  the Commonwealth Parliament. 
C)  the Australian Accounting Standards Review Board. 
D)  the Urgent Issues Group.

Question 4

The Corporations Act is very specific about what must,and must not,be included in the Directors' Report that is attached to a company's financial statements.

Accepted Answer

A) True 
 B)False

Question 5

The publication of a standard,exposure draft or final SIC interpretation requires approval by:

Accepted Answer

A)  the chairman of the IASB 
B)  a simple majority of the IASB's 14 members 
C)  nine of the IASB's 14 members 
D)  12 of the IASB's 14 members 
A)  the chairman of the IASB 
B)  a simple majority of the IASB's 14 members 
C)  nine of the IASB's 14 members 
D)  12 of the IASB's 14 members

Question 6

In accordance with Corporations Act,which of the following companies will be required to conform to the Australian Accounting Standards in the preparation of their financial reports?
I.proprietary company with gross operating revenues of $12 million,gross assets of $4 million and number of employees totalling 80
II.proprietary company with gross operating revenues of $6 million,gross assets of $4 million and number of employees totalling 60
III.company listed on the stock exchange
IV.company that issued a public debt
V.reporting entities

Accepted Answer

A)  I, II, III, and IV only 
B)  I, III, IV and V only 
C)  I, III and IV only 
D)  III, IV and V only 
A)  I, II, III, and IV only 
B)  I, III, IV and V only 
C)  I, III and IV only 
D)  III, IV and V only

Question 7

In accordance with AASB 101 Presentation of Financial Statements,a financial report comprises:

Accepted Answer

A)  a statement of financial position, an income statement and cash flow statement 
B)  a statement of financial position, an income statement, a statement of changes in equity and a cash flow statement 
C)  a statement of financial position, an income statement, a statement of changes in equity, a cash flow statement and notes to the accounts 
D)  a statement of financial position, an income statement, a cash flow statement and notes to the accounts 
A)  a statement of financial position, an income statement and cash flow statement 
B)  a statement of financial position, an income statement, a statement of changes in equity and a cash flow statement 
C)  a statement of financial position, an income statement, a statement of changes in equity, a cash flow statement and notes to the accounts 
D)  a statement of financial position, an income statement, a cash flow statement and notes to the accounts

Question 8

The idea that accounting information can be used by people without paying for it,and pass it on,defines accounting information as being:

Accepted Answer

A)  worthless. 
B)  a free good. 
C)  a public good. 
D)  a cheap good. 
A)  worthless. 
B)  a free good. 
C)  a public good. 
D)  a cheap good.

Question 9

A general purpose financial statements means:

Accepted Answer

A)  a financial report intended to meet the information needs of users who are unable to command the preparation of special purpose reports 
B)  a financial report prepared by the company for the needs of any user 
C)  a financial report intended to meet the information needs of preparers 
D)  a financial report intended to meet the information needs of users who are able to command the preparation of reports to satisfy all of their information needs 
A)  a financial report intended to meet the information needs of users who are unable to command the preparation of special purpose reports 
B)  a financial report prepared by the company for the needs of any user 
C)  a financial report intended to meet the information needs of preparers 
D)  a financial report intended to meet the information needs of users who are able to command the preparation of reports to satisfy all of their information needs

Question 10

The Corporations Act requires which of the following statements to be included in a Directors' Declaration?

Accepted Answer

A)  whether in their opinion the financial statements comply with accounting standards and the Corporations Act 
B)  whether in their opinion the financial statements give a true and fair view of the financial position and financial performance of the entity 
C)  whether or not in their opinion, when the declaration was made, there were reasonable grounds to believe that the company would be able to pay its debts as they become due 
D)  All of the given answers should be included. 
A)  whether in their opinion the financial statements comply with accounting standards and the Corporations Act 
B)  whether in their opinion the financial statements give a true and fair view of the financial position and financial performance of the entity 
C)  whether or not in their opinion, when the declaration was made, there were reasonable grounds to believe that the company would be able to pay its debts as they become due 
D)  All of the given answers should be included.

Question 11

The AASB's responsibilities include:

Accepted Answer

A)  developing accounting standards that have the force of law under the Corporations Act. 
B)  setting ethical guidelines for the accounting profession. 
C)  formulating standards to be used by the entities in the public sector. 
D)  developing accounting standards that have the force of law under the Corporations Act and formulating standards to be used by the entities in the public sector. 
A)  developing accounting standards that have the force of law under the Corporations Act. 
B)  setting ethical guidelines for the accounting profession. 
C)  formulating standards to be used by the entities in the public sector. 
D)  developing accounting standards that have the force of law under the Corporations Act and formulating standards to be used by the entities in the public sector.

Question 12

The Australian accounting profession is dominated by which bodies?

Accepted Answer

A)  CPA Australia, PriceWaterhouseCoopers Australia, the Institute of Chartered Accountants in Australia, and the Institute of Public Accountant 
B)  the Institute of Chartered Accountants in Australia, the Institute of Public Accountant, CPA Australia 
C)  the Institute of Chartered Accountants in Australia, the Institute of Public Accountant, Ernst & Young Australia 
D)  CPA Australia, the Institute of Chartered Accountants in Australia and the Institute of Public Accountant 
A)  CPA Australia, PriceWaterhouseCoopers Australia, the Institute of Chartered Accountants in Australia, and the Institute of Public Accountant 
B)  the Institute of Chartered Accountants in Australia, the Institute of Public Accountant, CPA Australia 
C)  the Institute of Chartered Accountants in Australia, the Institute of Public Accountant, Ernst & Young Australia 
D)  CPA Australia, the Institute of Chartered Accountants in Australia and the Institute of Public Accountant

Question 13

Under the Corporations Act,which of the following types of companies must comply with Australian accounting standards?
I.disclosing entities
II.publicly listed companies
III.large proprietary companies
IV.small proprietary companies

Accepted Answer

A)  all of the given answers 
B)  II only 
C)  II and III only 
D)  I, II and III only. 
A)  all of the given answers 
B)  II only 
C)  II and III only 
D)  I, II and III only.

Question 14

The Australian Accounting Standards Board reports to which body?

Accepted Answer

A)  the Urgent Issues Group 
B)  the Financial Accounting Standards Board 
C)  the Financial Reporting Council 
D)  the Australian Accounting Standards Review Board 
A)  the Urgent Issues Group 
B)  the Financial Accounting Standards Board 
C)  the Financial Reporting Council 
D)  the Australian Accounting Standards Review Board

Question 15

The Australian Securities and Investment Commission (ASIC)has the responsibility,among other things,to monitor and regulate various investment products and superannuation.

Accepted Answer

A) True 
 B)False

Question 16

The Corporations Act requires which of the following to be included in a Directors' Declaration?
I.State whether in their opinion the financial statements comply with accounting standards and the Corporations Act.
II.State whether in their opinion the financial statements give a true and fair view of the financial position and financial performance of the entity.
III.State whether or not in their opinion,when the declaration was made,there were reasonable grounds to believe that the company would be able to pay its debts as they become due.
IV.State details of directors' emoluments.
V.State principal activities of the entity.

Accepted Answer

A)  All of the given answers are correct. 
B)  I, II and III only 
C)  I, II, III and IV only 
D)  IV and V only 
A)  All of the given answers are correct. 
B)  I, II and III only 
C)  I, II, III and IV only 
D)  IV and V only

Question 17

Disclosing entities generally,are entities that have:
 securities (including debentures)quoted on the ASX; issued securities (including debentures)pursuant to a prospectus or a takeover scheme; and borrowing corporations.

Accepted Answer

A) True 
 B)False

Question 18

Audits are typically required for:

Accepted Answer

A)  all public companies, large proprietary companies and a limited number of small proprietary companies only. 
B)  Commonwealth and state government departments, statutory authorities, government companies and business undertakings and municipalities. 
C)  A and B 
D)  none of the given answers. 
A)  all public companies, large proprietary companies and a limited number of small proprietary companies only. 
B)  Commonwealth and state government departments, statutory authorities, government companies and business undertakings and municipalities. 
C)  A and B 
D)  none of the given answers.

Question 19

In recent times,the AASB has been reluctant to include alternative options within standards.This means:

Accepted Answer

A)  Entities within Australia will have the choice as to whether or not they choose to meet the requirements detailed in accounting standards. 
B)  The number of options within IFRS-adopted accounting standards is expected to be restricted, although compliance with the AASB standard will mean compliance with the IASB standard. 
C)  The number of options within IFRS-adopted accounting standards is expected to be restricted, which means that compliance with the AASB standard will not automatically mean compliance with the IASB standard. 
D)  The AASB is in direct conflict with the aims of the Financial Reporting Council in relation to international harmonisation. 
A)  Entities within Australia will have the choice as to whether or not they choose to meet the requirements detailed in accounting standards. 
B)  The number of options within IFRS-adopted accounting standards is expected to be restricted, although compliance with the AASB standard will mean compliance with the IASB standard. 
C)  The number of options within IFRS-adopted accounting standards is expected to be restricted, which means that compliance with the AASB standard will not automatically mean compliance with the IASB standard. 
D)  The AASB is in direct conflict with the aims of the Financial Reporting Council in relation to international harmonisation.

Question 20

The AASB Standards 1-99 Series includes those standards:

Accepted Answer

A)  where the standard has been developed for domestic application and relates specifically to the public or not-for-profit sectors. 
B)  where a standard equivalent to an existing or improved IAS is issued, with the number being used by the IASB being the same as that being used by the AASB (e.g. IAS 1 will be AASB 1). 
C)  where a standard equivalent to an existing or improved IAS is issued, with the number being used by the AASB 100 on from that being used by the IASB(e.g. IAS 1 will be AASB 101). 
D)  where a new IFRS has been issued by the IASB, with the number being used by the IASB being the same as that being used by the AASB(e.g. IFRS 1 will be AASB 1). 
A)  where the standard has been developed for domestic application and relates specifically to the public or not-for-profit sectors. 
B)  where a standard equivalent to an existing or improved IAS is issued, with the number being used by the IASB being the same as that being used by the AASB (e.g. IAS 1 will be AASB 1). 
C)  where a standard equivalent to an existing or improved IAS is issued, with the number being used by the AASB 100 on from that being used by the IASB(e.g. IAS 1 will be AASB 101). 
D)  where a new IFRS has been issued by the IASB, with the number being used by the IASB being the same as that being used by the AASB(e.g. IFRS 1 will be AASB 1).

Exam 1: An Overview of the Australian External Reporting Environment

Some of the perceived barriers to the harmonisation process (for the harmonisation of accounting standards globally)include:

The functioning of the Auditing and Assurance Standards Board is overseen by:

The only body with the power to veto a standard recommended by the AASB is:

The Corporations Act is very specific about what must,and must not,be included in the Directors' Report that is attached to a company's financial statements.

The publication of a standard,exposure draft or final SIC interpretation requires approval by:

In accordance with AASB 101 Presentation of Financial Statements,a financial report comprises:

The idea that accounting information can be used by people without paying for it,and pass it on,defines accounting information as being:

A general purpose financial statements means:

The Corporations Act requires which of the following statements to be included in a Directors' Declaration?

The AASB's responsibilities include:

The Australian accounting profession is dominated by which bodies?

Under the Corporations Act,which of the following types of companies must comply with Australian accounting standards? I.disclosing entities II.publicly listed companies III.large proprietary companies IV.small proprietary companies

The Australian Accounting Standards Board reports to which body?

The Australian Securities and Investment Commission (ASIC)has the responsibility,among other things,to monitor and regulate various investment products and superannuation.

Disclosing entities generally,are entities that have: securities (including debentures)quoted on the ASX; issued securities (including debentures)pursuant to a prospectus or a takeover scheme; and borrowing corporations.

Audits are typically required for:

In recent times,the AASB has been reluctant to include alternative options within standards.This means:

The AASB Standards 1-99 Series includes those standards:

The Conceptual Framework of Accounting and Its Relevance to Financial Reporting

Theories of Accounting

An Overview of Accounting for Assets

Depreciation of Property, plant and Equipment

Revaluations and Impairment Testing of Non-Current Assets

Inventory

Accounting for Intangibles

Accounting for Heritage Assets and Biological Assets

An Overview of Accounting for Liabilities

Accounting for Leases

Accounting for Employee Benefits

Share Capital and Reserves

Accounting for Financial Instruments

Revenue Recognition Issues

The Statement of Comprehensive Income and Statement of Changes in Equity

Accounting for Share-Based Payments

Accounting for Income Taxes

The Statement of Cash Flows

Accounting for the Extractive Industries

Accounting for General Insurance Contracts

Accounting for Superannuation Plans

Events Occurring After the End of the Reporting Period

Segment Reporting

Related Party Disclosures

Earnings Per Share

Accounting for Group Structures

Further Consolidation Issues I: Accounting for Intragroup Transactions

Further Consolidation Issues II: Accounting for Non-Controlling Interests

Further Consolidation Issues IV: Accounting for Changes in the Degree of Ownership of a Subsidiary

Accounting for Equity Investments,including Investments in Associates and Joint Arrangements

Accounting for Foreign Currency Transactions

Translating the Financial Statements of Foreign Operations

Accounting for Corporate Social Responsibility

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