Question 1

The IASB's segment reporting standard IAS 14

Accepted Answer

A)  gives management more discretion to identify geographic segments. 
B)  has primary segment which has higher disclosure requirement. 
C)  prohibits a matrix approach. 
D)  restricts the criteria for identifying segments to assessing "risks and returns". 
A)  gives management more discretion to identify geographic segments. 
B)  has primary segment which has higher disclosure requirement. 
C)  prohibits a matrix approach. 
D)  restricts the criteria for identifying segments to assessing "risks and returns".

Question 2

The major argument against segment disclosure is that

Accepted Answer

A)  data collection costs are high 
B)  that competitors will take advantage of the data 
C)  earnings conservatism will be affected 
D)  in some cases it may be inappropriate and misleading 
A)  data collection costs are high 
B)  that competitors will take advantage of the data 
C)  earnings conservatism will be affected 
D)  in some cases it may be inappropriate and misleading

Question 3

Segment-based forecasts

Accepted Answer

A)  underperform consolidated-based forecasts 
B)  out perform consolidated-based forecasts 
C)  do not depend on firm size 
D)  do not apply to OECD MNEs 
A)  underperform consolidated-based forecasts 
B)  out perform consolidated-based forecasts 
C)  do not depend on firm size 
D)  do not apply to OECD MNEs

Question 4

A major difference between U.S. segment disclosures and those of other countries is that

Accepted Answer

A)  U.S. companies tend to disclose more segments on average than do U.K. companies. 
B)  U.K. companies have several different sources of standards, whereas U.S. companies only have to worry about the FASB. 
C)  U.K. company law gives significant direction to companies on establishing segments, whereas the FASB gives no discretion to management on the establishment of segments. 
D)  U.S. companies have to report geographic sales by source and destination, whereas British companies are only allowed to report geographic sales by destination. 
A)  U.S. companies tend to disclose more segments on average than do U.K. companies. 
B)  U.K. companies have several different sources of standards, whereas U.S. companies only have to worry about the FASB. 
C)  U.K. company law gives significant direction to companies on establishing segments, whereas the FASB gives no discretion to management on the establishment of segments. 
D)  U.S. companies have to report geographic sales by source and destination, whereas British companies are only allowed to report geographic sales by destination.

Question 5

MNEs argue against disseminating more information because a competitive disadvantage.

Accepted Answer

A) True 
 B)False

Question 6

A major argument against segment disclosure is that

Accepted Answer

A)  gross margins will fall 
B)  transfer pricing activity will increase 
C)  in some cases it may be misleading 
D)  MNEs will have to do more mergers 
A)  gross margins will fall 
B)  transfer pricing activity will increase 
C)  in some cases it may be misleading 
D)  MNEs will have to do more mergers

Question 7

According to predictive ability tests of segment reports,

Accepted Answer

A)  it has clearly been proven that users use disaggregated information to make forecasts. 
B)  forecasts based on line of business data are not as accurate as those based on geographic segments. 
C)  forecasts based on segment earnings are more accurate than those based on segment sales. 
D)  segment information is not useful for small firms. 
A)  it has clearly been proven that users use disaggregated information to make forecasts. 
B)  forecasts based on line of business data are not as accurate as those based on geographic segments. 
C)  forecasts based on segment earnings are more accurate than those based on segment sales. 
D)  segment information is not useful for small firms.

Question 8

Prediction of earnings studies have all concluded that forecasts are less accurate if they are based on line-of-business segmental data rather than consolidated earnings.

Accepted Answer

A) True 
 B)False

Question 9

Segment disclosures

Accepted Answer

A)  do not affect firm risk 
B)  increase firm risk 
C)  increase the MNE price variability 
D)  decrease the MNE price variability 
A)  do not affect firm risk 
B)  increase firm risk 
C)  increase the MNE price variability 
D)  decrease the MNE price variability

Question 10

According to U.S. and British companies, narrowly-defined line of business and geographic segments are

Accepted Answer

A)  a cost of preparation but not a cost of competitive disadvantage. 
B)  difficult to determine because of their highly aggregated organizational structures. 
C)  easy to determine, because they only have to report sales data. 
D)  a competitive disadvantage cost since not everyone in the world has to account for segments the same way. 
A)  a cost of preparation but not a cost of competitive disadvantage. 
B)  difficult to determine because of their highly aggregated organizational structures. 
C)  easy to determine, because they only have to report sales data. 
D)  a competitive disadvantage cost since not everyone in the world has to account for segments the same way.

Question 11

External yardsticks are available for most diversified MNEs.

Accepted Answer

A) True 
 B)False

Question 12

The IASB's segment reporting standard IAS 14

Accepted Answer

A)  gives management more discretion to identify geographic segments. 
B)  bases its requirements on the company's organization structure and internal reporting system. 
C)  contradicts proposals for reform issued by the FASB. 
D)  restricts the criteria for identifying segments to assessing "risks and returns". 
A)  gives management more discretion to identify geographic segments. 
B)  bases its requirements on the company's organization structure and internal reporting system. 
C)  contradicts proposals for reform issued by the FASB. 
D)  restricts the criteria for identifying segments to assessing "risks and returns".

Question 13

Segment information is likely to help investors by allowing them to combine company-specific information with external information.

Accepted Answer

A) True 
 B)False

Question 14

A major value of segment information for users is that

Accepted Answer

A)  it focuses on issues other than cash flows. 
B)  in the United States, GAAP requires firms to disclose segment information by major country. 
C)  it provides information to investors that might involve cost of preparation but not cost of competitive advantage. 
D)  it allows users who have different information needs to get disaggregated information that might be of use to them. 
A)  it focuses on issues other than cash flows. 
B)  in the United States, GAAP requires firms to disclose segment information by major country. 
C)  it provides information to investors that might involve cost of preparation but not cost of competitive advantage. 
D)  it allows users who have different information needs to get disaggregated information that might be of use to them.

Question 15

Gaming can occur if the users of financial statements perceive the information contained in them to be a free good.

Accepted Answer

A) True 
 B)False

Question 16

Segment information is typically provided for
I. Line of business
II. Geographical areas

Accepted Answer

A)  I only 
B)  II only 
C)  neither I or II 
D)  both I and II 
A)  I only 
B)  II only 
C)  neither I or II 
D)  both I and II

Question 17

According to the British approach to segment disclosures,

Accepted Answer

A)  the Companies Act requires line of business sales but not geographic sales. 
B)  there is significant guidance as to what is material or what a reportable segment is. 
C)  the London Stock Exchange requires that firms provide geographic segments by country. 
D)  SSAP 25 requires geographic segments by source and destination. 
A)  the Companies Act requires line of business sales but not geographic sales. 
B)  there is significant guidance as to what is material or what a reportable segment is. 
C)  the London Stock Exchange requires that firms provide geographic segments by country. 
D)  SSAP 25 requires geographic segments by source and destination.

Question 18

Eliminations are

Accepted Answer

A)  are a necessary part of segment reporting 
B)  only required in consolidations 
C)  not required in segment reporting 
D)  are being considered in an IASC proposal 
A)  are a necessary part of segment reporting 
B)  only required in consolidations 
C)  not required in segment reporting 
D)  are being considered in an IASC proposal

Question 19

Market risk measures are correlated to
I. Accounting-based risk measures formed from line of businesses
II. Accounting-based risk measures formed from geographical areas

Accepted Answer

A)  I only 
B)  II only 
C)  neither I or II 
D)  both I and II 
A)  I only 
B)  II only 
C)  neither I or II 
D)  both I and II

Question 20

Which of the following is not a major problem for segment reporting?

Accepted Answer

A)  There are problems with verification of information. 
B)  There are problems with segment identification. 
C)  The greater the disaggregation, the more likely the need to allocate common costs, which could distort profits. 
D)  U.S. firms do not provide much information about their segments. 
A)  There are problems with verification of information. 
B)  There are problems with segment identification. 
C)  The greater the disaggregation, the more likely the need to allocate common costs, which could distort profits. 
D)  U.S. firms do not provide much information about their segments.

The IASB's segment reporting standard IAS 14

The major argument against segment disclosure is that

Segment-based forecasts

A major difference between U.S. segment disclosures and those of other countries is that

MNEs argue against disseminating more information because a competitive disadvantage.

A major argument against segment disclosure is that

According to predictive ability tests of segment reports,

Prediction of earnings studies have all concluded that forecasts are less accurate if they are based on line-of-business segmental data rather than consolidated earnings.

Segment disclosures

According to U.S. and British companies, narrowly-defined line of business and geographic segments are

External yardsticks are available for most diversified MNEs.

The IASB's segment reporting standard IAS 14

Segment information is likely to help investors by allowing them to combine company-specific information with external information.

A major value of segment information for users is that

Gaming can occur if the users of financial statements perceive the information contained in them to be a free good.

Segment information is typically provided for I. Line of business II. Geographical areas

According to the British approach to segment disclosures,

Eliminations are

Market risk measures are correlated to I. Accounting-based risk measures formed from line of businesses II. Accounting-based risk measures formed from geographical areas

Which of the following is not a major problem for segment reporting?

International Accounting and International Business

International Accounting Patterns, Culture and Development

Comparative International Financial Accounting I

Comparative International Financial Accounting II

International Financial Statement Analysis

International Transparency and Disclosure

International Accounting Standards and Global Convergence

International Business Combinations, Goodwill and Intangibles

Foreign Currency Transactions and Translation

International Accounting for Price Changes

Corporate Governance and Control of Global Operations

Foreign Exchange Risk Management

International Budgeting and Performance Evaluation

International Auditing Issues

International Taxation Issues

Filters

Exam 9: International Segment Reporting

The IASB's segment reporting standard IAS 14

The major argument against segment disclosure is that

Segment-based forecasts

A major difference between U.S. segment disclosures and those of other countries is that

MNEs argue against disseminating more information because a competitive disadvantage.

A major argument against segment disclosure is that

According to predictive ability tests of segment reports,

Prediction of earnings studies have all concluded that forecasts are less accurate if they are based on line-of-business segmental data rather than consolidated earnings.

Segment disclosures

According to U.S. and British companies, narrowly-defined line of business and geographic segments are

External yardsticks are available for most diversified MNEs.

The IASB's segment reporting standard IAS 14

Segment information is likely to help investors by allowing them to combine company-specific information with external information.

A major value of segment information for users is that

Gaming can occur if the users of financial statements perceive the information contained in them to be a free good.

Segment information is typically provided for I. Line of business II. Geographical areas

According to the British approach to segment disclosures,

Eliminations are

Market risk measures are correlated to I. Accounting-based risk measures formed from line of businesses II. Accounting-based risk measures formed from geographical areas

Which of the following is not a major problem for segment reporting?

International Accounting and International Business

International Accounting Patterns, Culture and Development

Comparative International Financial Accounting I

Comparative International Financial Accounting II

International Financial Statement Analysis

International Transparency and Disclosure

International Accounting Standards and Global Convergence

International Business Combinations, Goodwill and Intangibles

Foreign Currency Transactions and Translation

International Accounting for Price Changes

Corporate Governance and Control of Global Operations

Foreign Exchange Risk Management

International Budgeting and Performance Evaluation

International Auditing Issues

International Taxation Issues

Filters