Question 1

What is one of the primary reasons why securities commissions are often ineffective enforcement agencies for accounting standards?

Accepted Answer

A) Lack of knowledge 
B) Lack of financing 
C) Lack of independence 
D) Lack of support from professional accounting bodies 
A) Lack of knowledge 
B) Lack of financing 
C) Lack of independence 
D) Lack of support from professional accounting bodies

Question 2

High Traders Inc. is a private Canadian company. The company adopted accounting standards for private enterprises in 2011. However, a new CFO has just been hired and is now suggesting that the company consider adopting IFRS in the near future. 
Required:
Outline four possible reasons that a private company in Canada might choose to adopt IFRS.

Accepted Answer

A private company might decide to adopt

Question 3

Assume that a nation has fully adopted IFRS. Which of the following statements is true?

Accepted Answer

A) Since the nation has fully adopted IFRS, all standards will be applied in the same way as other nations that have fully adopted IFRS. 
B) Since the nation has fully adopted IFRS, IFRS must be applied to all business enterprises in the nation. 
C) Although the nation has fully adopted IFRS, standards may be applied in different ways to suit the local environment. 
D) Although the nation has fully adopted IFRS, business enterprises can choose to opt out as long as they have government approval to do so. 
A) Since the nation has fully adopted IFRS, all standards will be applied in the same way as other nations that have fully adopted IFRS. 
B) Since the nation has fully adopted IFRS, IFRS must be applied to all business enterprises in the nation. 
C) Although the nation has fully adopted IFRS, standards may be applied in different ways to suit the local environment. 
D) Although the nation has fully adopted IFRS, business enterprises can choose to opt out as long as they have government approval to do so.

Question 4

In Canada, there are many types of business and non-business organizations and four different reporting standards that might be applicable.
Required:
What types of organizations are required to follow IFRS? What types of organizations may follow IFRS if they choose to do so, and how is this choice made?

Accepted Answer

Public companies and those entities that

Question 5

Which of the following statements about the adoption of IFRS is true?

Accepted Answer

A) Many European countries adopted IFRS prior to 2011. 
B) Canada adopted IFRS in 2012. 
C) All European and North American countries adopted IFRS in 2011. 
D) All European, Asian, and African countries adopted IFRS in 2011. 
A) Many European countries adopted IFRS prior to 2011. 
B) Canada adopted IFRS in 2012. 
C) All European and North American countries adopted IFRS in 2011. 
D) All European, Asian, and African countries adopted IFRS in 2011.

Question 6

XY Co. is a Canadian company that recently received approval for a loan from a bank in Europe. The bankers require statements prepared "in accordance with IFRS as adopted by the EU." The CEO recently stated that now that Canada has adopted IFRS, the company only needs to prepare one set of financial statements for issuance.
Required:
As the CFO, reply to this CEO's statement. Why might this not be the case in this situation? In what areas might there be differences? How would this report have to be prepared and issued?

Accepted Answer

The EU is an example of a "country" that

Question 7

Many countries around the world have adopted International Financial Reporting Standards as their accounting standards. As a result, companies competing in the same industry, but operating in different countries, should use the same accounting policies. This, in turn, makes interpretation and analysis of peers' statements listed on different exchanges far easier than in the past.
Required:
Is the above statement true? Explain.

Accepted Answer

This statement is True but to a limited

Question 8

Which nation does not require a cash flow statement in its financial reporting?

Accepted Answer

A) United States 
B) United Kingdom 
C) Australia 
D) Japan 
A) United States 
B) United Kingdom 
C) Australia 
D) Japan

Question 9

Which GAAP approach for private companies would smaller countries that do not have well-established standard-setting processes be most likely to use?

Accepted Answer

A) IFRS for SMEs 
B) Full IFRS 
C) Disclosed basis of accounting 
D) Code law requirement 
A) IFRS for SMEs 
B) Full IFRS 
C) Disclosed basis of accounting 
D) Code law requirement

Question 10

Why might a large private company choose to use full IFRS?

Accepted Answer

A) Its assets exceed $10,000,000. 
B) It only uses debt financing. 
C) It only uses equity financing. 
D) It competes with public companies for financing. 
A) Its assets exceed $10,000,000. 
B) It only uses debt financing. 
C) It only uses equity financing. 
D) It competes with public companies for financing.

Question 11

Both Canada and Japan have adopted IFRS even though the two countries differ in many ways. What is one area in which the two countries differ?

Accepted Answer

A) Corporate structure 
B) Issuance of consolidated financial statements 
C) Use of common law 
D) Ability to select accounting policies 
A) Corporate structure 
B) Issuance of consolidated financial statements 
C) Use of common law 
D) Ability to select accounting policies

Question 12

In Canada, we have business and non-business organizations.
Required:
Explain the difference between these two types of organizations. Why should they be allowed to follow different accounting policies?

Accepted Answer

Business organizations, whether private

Question 13

Which of the following statements is not true about private companies?

Accepted Answer

A) Private companies usually have easily identifiable user groups. 
B) User groups of a private company are not permitted to request additional information, outside of the issued financial statements, from the company. 
C) Private companies are not required to issue "general-purpose" financial statements. 
D) Private companies often report to specific user groups for specific purposes. 
A) Private companies usually have easily identifiable user groups. 
B) User groups of a private company are not permitted to request additional information, outside of the issued financial statements, from the company. 
C) Private companies are not required to issue "general-purpose" financial statements. 
D) Private companies often report to specific user groups for specific purposes.

Question 14

Which of the following statements about the adoption of IFRS is true?

Accepted Answer

A) Code-law countries that adopt IFRS must adopt it completely, but common-law countries can choose to partially adopt IFRS. 
B) Common-law countries that adopt IFRS must adopt it completely, but code-law countries can choose to partially adopt IFRS. 
C) Both code-law and common-law countries can choose to partially adopt IFRS. 
D) Both code-law and common-law countries that choose to adopt IFRS must adopt it in its entirety. 
A) Code-law countries that adopt IFRS must adopt it completely, but common-law countries can choose to partially adopt IFRS. 
B) Common-law countries that adopt IFRS must adopt it completely, but code-law countries can choose to partially adopt IFRS. 
C) Both code-law and common-law countries can choose to partially adopt IFRS. 
D) Both code-law and common-law countries that choose to adopt IFRS must adopt it in its entirety.

Question 15

What accounting standards are private banks and investment funds required to follow for their consolidated, general-purpose, publicly issued financial statements?

Accepted Answer

A) IFRS 
B) ASPE 
C) NFP accounting standards 
D) PSAB recommendations 
A) IFRS 
B) ASPE 
C) NFP accounting standards 
D) PSAB recommendations

Question 16

Which of the following is true about the standards for publicly accountable enterprises in the CICA Handbook, Part I?

Accepted Answer

A) The standards are similar to U.S. GAAP. 
B) The standards are adaptations of IFRS that have been tailored to Canadian circumstances. 
C) The standards are similar to ASPE. 
D) The standards are identical, word for word, to IFRS. 
A) The standards are similar to U.S. GAAP. 
B) The standards are adaptations of IFRS that have been tailored to Canadian circumstances. 
C) The standards are similar to ASPE. 
D) The standards are identical, word for word, to IFRS.

Question 17

One of the components that a nation must have to effectively apply international standards is quality auditing. Which of the following statements about auditing is true?

Accepted Answer

A) Audit quality is consistently high around the world due to the implementation of International Auditing Standards. 
B) Most audits around the world are conducted by the Big Four, which ensures consistency. 
C) Audit quality is consistent around the world as smaller countries import well-educated auditors to ensure expertise. 
D) Audit quality is inconsistent around the world. 
A) Audit quality is consistently high around the world due to the implementation of International Auditing Standards. 
B) Most audits around the world are conducted by the Big Four, which ensures consistency. 
C) Audit quality is consistent around the world as smaller countries import well-educated auditors to ensure expertise. 
D) Audit quality is inconsistent around the world.

Question 18

What is the effect of a nation's high inflation on its business enterprises?

Accepted Answer

A) There would not be any impact on the long-term earnings of companies. 
B) It could cause a revaluation of assets. 
C) It could decrease companies' reliance on net monetary liabilities. 
D) It could lead companies to hold more monetary investments. 
A) There would not be any impact on the long-term earnings of companies. 
B) It could cause a revaluation of assets. 
C) It could decrease companies' reliance on net monetary liabilities. 
D) It could lead companies to hold more monetary investments.

Question 19

A private company that is closely held and internally financed is most likely to report under ________.

Accepted Answer

A) IFRS 
B) ASPE 
C) NFP 
D) PSAB recommendations 
A) IFRS 
B) ASPE 
C) NFP 
D) PSAB recommendations

Question 20

Private companies in Canada may follow either IFRS or accounting standards for private companies.
Required:
Why did Canada adopt accounting standards for private companies? What is different about private companies and public companies that require a different set of accounting standards?

Accepted Answer

Canadian standard-setters decided to ado

What is one of the primary reasons why securities commissions are often ineffective enforcement agencies for accounting standards?

Assume that a nation has fully adopted IFRS. Which of the following statements is true?

Which of the following statements about the adoption of IFRS is true?

Which nation does not require a cash flow statement in its financial reporting?

Which GAAP approach for private companies would smaller countries that do not have well-established standard-setting processes be most likely to use?

Why might a large private company choose to use full IFRS?

Both Canada and Japan have adopted IFRS even though the two countries differ in many ways. What is one area in which the two countries differ?

In Canada, we have business and non-business organizations. Required: Explain the difference between these two types of organizations. Why should they be allowed to follow different accounting policies?

Which of the following statements is not true about private companies?

Which of the following statements about the adoption of IFRS is true?

What accounting standards are private banks and investment funds required to follow for their consolidated, general-purpose, publicly issued financial statements?

Which of the following is true about the standards for publicly accountable enterprises in the CICA Handbook, Part I?

One of the components that a nation must have to effectively apply international standards is quality auditing. Which of the following statements about auditing is true?

What is the effect of a nation's high inflation on its business enterprises?

A private company that is closely held and internally financed is most likely to report under ________.

Private companies in Canada may follow either IFRS or accounting standards for private companies. Required: Why did Canada adopt accounting standards for private companies? What is different about private companies and public companies that require a different set of accounting standards?

Intercorporate Equity Investments: an Introduction

Business Combinations

Appendix A: AIncome Tax Allocation

Wholly Owned Subsidiaries: Reporting Subsequent Acquisitions

Appendix A: Wholly Owned Subsidiaries: Reporting Subsequent Acquisitions

Appendix B: Wholly Owned Subsidiaries: Reporting Subsequent Acquisitions

Consolidation of Non-Wholly Owned Subsidiaries

Appendix A: Step Purchases

Appendix B: Decreases in Ownership Interest

Subsequent-Year Consolidations: General Approach

Appendix A: Preferred and Restricted Shares of Investee Corporation

Appendix B: Intercompany Bond Holdings

Segment and Interim Reporting

Foreign Currency Transactions and Hedges

Reporting Foreign Operations

Financial Reporting for Not-For-Profit Organizations

Appendix A: Fund Accounting

Public Sector Financial Reporting

Filters

Exam 1: Setting the Stage

What is one of the primary reasons why securities commissions are often ineffective enforcement agencies for accounting standards?

Assume that a nation has fully adopted IFRS. Which of the following statements is true?

Which of the following statements about the adoption of IFRS is true?

Which nation does not require a cash flow statement in its financial reporting?

Which GAAP approach for private companies would smaller countries that do not have well-established standard-setting processes be most likely to use?

Why might a large private company choose to use full IFRS?

Both Canada and Japan have adopted IFRS even though the two countries differ in many ways. What is one area in which the two countries differ?

In Canada, we have business and non-business organizations. Required: Explain the difference between these two types of organizations. Why should they be allowed to follow different accounting policies?

Which of the following statements is not true about private companies?

Which of the following statements about the adoption of IFRS is true?

What accounting standards are private banks and investment funds required to follow for their consolidated, general-purpose, publicly issued financial statements?

Which of the following is true about the standards for publicly accountable enterprises in the CICA Handbook, Part I?

One of the components that a nation must have to effectively apply international standards is quality auditing. Which of the following statements about auditing is true?

What is the effect of a nation's high inflation on its business enterprises?

A private company that is closely held and internally financed is most likely to report under ________.

Private companies in Canada may follow either IFRS or accounting standards for private companies. Required: Why did Canada adopt accounting standards for private companies? What is different about private companies and public companies that require a different set of accounting standards?

Intercorporate Equity Investments: an Introduction

Business Combinations

Appendix A: AIncome Tax Allocation

Wholly Owned Subsidiaries: Reporting Subsequent Acquisitions

Appendix A: Wholly Owned Subsidiaries: Reporting Subsequent Acquisitions

Appendix B: Wholly Owned Subsidiaries: Reporting Subsequent Acquisitions

Consolidation of Non-Wholly Owned Subsidiaries

Appendix A: Step Purchases

Appendix B: Decreases in Ownership Interest

Subsequent-Year Consolidations: General Approach

Appendix A: Preferred and Restricted Shares of Investee Corporation

Appendix B: Intercompany Bond Holdings

Segment and Interim Reporting

Foreign Currency Transactions and Hedges

Reporting Foreign Operations

Financial Reporting for Not-For-Profit Organizations

Appendix A: Fund Accounting

Public Sector Financial Reporting

Filters