Question 1

The AICPA has exclusive authority in the private sector for promulgating auditing rules.

Accepted Answer

A) True 
 B)False  False

Question 2

The establishment of which of the following groups has resulted in a challenge to the FASB's standard-setting powers?

Accepted Answer

A)  The Governmental Accounting Standards Board (GAS
B)  
B)  The Emerging Issues Task Force (EITF) 
C)  The Accounting Standards Executive Committee (AcSE
C)  
D)  All of the above 
A)  The Governmental Accounting Standards Board (GAS
B)  
B)  The Emerging Issues Task Force (EITF) 
C)  The Accounting Standards Executive Committee (AcSE
C)  
D)  All of the above D

Question 3

FASB statements have resulted in a more conservative balance sheet and immediate recognition of events on the income statement.

Accepted Answer

A) True 
 B)False  True

Question 4

The Committee on Accounting Procedures (CAP) used a formalized deductive approach to develop a comprehensive accounting theory.

Accepted Answer

A) True 
 B)False

Question 5

How might the AICPA regain some of the power it has lost over the years? Are there any disadvantages to these proposals?

Accepted Answer

The AICPA might regain some power by bec

Question 6

The importance of the auditing function relative to the management consulting function is declining in major auditing firms.

Accepted Answer

A) True 
 B)False

Question 7

An important role of the AICPA is to curb "shopping for accounting principles."

Accepted Answer

A) True 
 B)False

Question 8

What was the purpose of APB Statement 4, Basic Concepts and Accounting Principles Underlying Financial Statements of Business Enterprises?

Accepted Answer

A)  To provide a foundation for evaluating existing accounting practices 
B)  To assist in solving accounting problems and to guide the future development of financial accounting 
C)  To enhance understanding of the purposes of financial accounting 
D)  All of the above 
A)  To provide a foundation for evaluating existing accounting practices 
B)  To assist in solving accounting problems and to guide the future development of financial accounting 
C)  To enhance understanding of the purposes of financial accounting 
D)  All of the above

Question 9

The Trueblood Study Group formed the FASB and called for significant changes in the establishment of financial accounting standards.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is not true regarding Accounting Series Release No. 4?

Accepted Answer

A)  It stated that financial statements filed with the SEC and prepared in accordance with accounting principles for which there is no substantial authoritative support would be presumed to be misleading. 
B)  It implied that the SEC might in the future determine acceptable accounting practices and mandate methods to be used in reports filed with it. 
C)  It established an authoritative body for the development of accounting standards. 
D)  It indicated that the SEC was growing impatient with the accounting profession. 
A)  It stated that financial statements filed with the SEC and prepared in accordance with accounting principles for which there is no substantial authoritative support would be presumed to be misleading. 
B)  It implied that the SEC might in the future determine acceptable accounting practices and mandate methods to be used in reports filed with it. 
C)  It established an authoritative body for the development of accounting standards. 
D)  It indicated that the SEC was growing impatient with the accounting profession.

Question 11

Which of the following was a controversial issue faced by the Accounting Principles Board (APB)?

Accepted Answer

A)  The investment tax credit 
B)  Income tax allocation 
C)  Business combinations and goodwill 
D)  All of the above 
A)  The investment tax credit 
B)  Income tax allocation 
C)  Business combinations and goodwill 
D)  All of the above

Question 12

The SEC is legally empowered to regulate accounting principles.

Accepted Answer

A) True 
 B)False

Question 13

The Accounting Standards Executive Committee of the AICPA (ASEC) and the Emerging Issues Task Force (EITF) were established to solve the problems of particular industries as well as narrow technical issues.

Accepted Answer

A) True 
 B)False

Question 14

The Litigation Reform Act of 1995 requires that an audit include procedures designed to guarantee that illegal acts that would materially affect financial statements will be detected.

Accepted Answer

A) True 
 B)False

Question 15

The Federal Litigation Reform Act of 1995 replaced the previous proportionate liability requirement with joint and several liability for damages suffered by third parties who rely on the financial statement of firms attested to by CPAs.

Accepted Answer

A) True 
 B)False

Question 16

In 1930 the AICPA began working with which of the following organizations to prepare "five broad accounting principles," one of the most important documents in the development of accounting rule making?

Accepted Answer

A)  The SEC 
B)  The NYSE 
C)  The AAA 
D)  The FTC 
A)  The SEC 
B)  The NYSE 
C)  The AAA 
D)  The FTC

Question 17

The responsibility of the Financial Accounting Foundation is to elect the board of trustees, which selects FASB members, funds the board's activities, and performs the oversight role.

Accepted Answer

A) True 
 B)False

Question 18

A normal four-to-three majority vote is required for passing new accounting standards.

Accepted Answer

A) True 
 B)False

Question 19

Which state passed the law that first created the designation "Certified Public Accountant"?

Accepted Answer

A)  Massachusetts 
B)  California 
C)  Ohio 
D)  New York 
E)  Iowa 
A)  Massachusetts 
B)  California 
C)  Ohio 
D)  New York 
E)  Iowa

Question 20

Which of the following represented the first formal attempt to develop "generally accepted accounting principles"?

Accepted Answer

A)  "Approved Methods for the Preparation of Balance Sheet Statements" in 1918 
B)  "Five broad accounting principles" in 1932 
C)  Accounting Research Bulletin (AR
B)  43 
D)  The FASB's conceptual framework project 
A)  "Approved Methods for the Preparation of Balance Sheet Statements" in 1918 
B)  "Five broad accounting principles" in 1932 
C)  Accounting Research Bulletin (AR
B)  43 
D)  The FASB's conceptual framework project

The AICPA has exclusive authority in the private sector for promulgating auditing rules.

The establishment of which of the following groups has resulted in a challenge to the FASB's standard-setting powers?

FASB statements have resulted in a more conservative balance sheet and immediate recognition of events on the income statement.

The Committee on Accounting Procedures (CAP) used a formalized deductive approach to develop a comprehensive accounting theory.

How might the AICPA regain some of the power it has lost over the years? Are there any disadvantages to these proposals?

The importance of the auditing function relative to the management consulting function is declining in major auditing firms.

An important role of the AICPA is to curb "shopping for accounting principles."

What was the purpose of APB Statement 4, Basic Concepts and Accounting Principles Underlying Financial Statements of Business Enterprises?

The Trueblood Study Group formed the FASB and called for significant changes in the establishment of financial accounting standards.

Which of the following is not true regarding Accounting Series Release No. 4?

Which of the following was a controversial issue faced by the Accounting Principles Board (APB)?

The SEC is legally empowered to regulate accounting principles.

The Accounting Standards Executive Committee of the AICPA (ASEC) and the Emerging Issues Task Force (EITF) were established to solve the problems of particular industries as well as narrow technical issues.

The Litigation Reform Act of 1995 requires that an audit include procedures designed to guarantee that illegal acts that would materially affect financial statements will be detected.

The Federal Litigation Reform Act of 1995 replaced the previous proportionate liability requirement with joint and several liability for damages suffered by third parties who rely on the financial statement of firms attested to by CPAs.

In 1930 the AICPA began working with which of the following organizations to prepare "five broad accounting principles," one of the most important documents in the development of accounting rule making?

The responsibility of the Financial Accounting Foundation is to elect the board of trustees, which selects FASB members, funds the board's activities, and performs the oversight role.

A normal four-to-three majority vote is required for passing new accounting standards.

Which state passed the law that first created the designation "Certified Public Accountant"?

Which of the following represented the first formal attempt to develop "generally accepted accounting principles"?

An Introduction to Accounting Theory

Accounting Theory and Accounting Research

The Economics of Financial Reporting Regulation

Postulates, Principles, and Concepts

The Search for Objectives

The Fasbs Conceptual Framework

Usefulness of Accounting Information to Investors and Creditors

Uniformity and Disclosure: Some Policy Making Directions

International Accounting

The Balance Sheet

The Income Statement

Statements of Cash Flows

Accounting for Inflation and Changing Prices

Income Taxes and Financial Accounting

Pensions and Other Postretirement Benefits

Leases

Intercorporate Equity Investments

Filters

Exam 3: Development of Institutional Structure of Financial Accounting

The AICPA has exclusive authority in the private sector for promulgating auditing rules.

The establishment of which of the following groups has resulted in a challenge to the FASB's standard-setting powers?

FASB statements have resulted in a more conservative balance sheet and immediate recognition of events on the income statement.

The Committee on Accounting Procedures (CAP) used a formalized deductive approach to develop a comprehensive accounting theory.

How might the AICPA regain some of the power it has lost over the years? Are there any disadvantages to these proposals?

The importance of the auditing function relative to the management consulting function is declining in major auditing firms.

An important role of the AICPA is to curb "shopping for accounting principles."

What was the purpose of APB Statement 4, Basic Concepts and Accounting Principles Underlying Financial Statements of Business Enterprises?

The Trueblood Study Group formed the FASB and called for significant changes in the establishment of financial accounting standards.

Which of the following is not true regarding Accounting Series Release No. 4?

Which of the following was a controversial issue faced by the Accounting Principles Board (APB)?

The SEC is legally empowered to regulate accounting principles.

The Accounting Standards Executive Committee of the AICPA (ASEC) and the Emerging Issues Task Force (EITF) were established to solve the problems of particular industries as well as narrow technical issues.

The Litigation Reform Act of 1995 requires that an audit include procedures designed to guarantee that illegal acts that would materially affect financial statements will be detected.

The Federal Litigation Reform Act of 1995 replaced the previous proportionate liability requirement with joint and several liability for damages suffered by third parties who rely on the financial statement of firms attested to by CPAs.

In 1930 the AICPA began working with which of the following organizations to prepare "five broad accounting principles," one of the most important documents in the development of accounting rule making?

The responsibility of the Financial Accounting Foundation is to elect the board of trustees, which selects FASB members, funds the board's activities, and performs the oversight role.

A normal four-to-three majority vote is required for passing new accounting standards.

Which state passed the law that first created the designation "Certified Public Accountant"?

Which of the following represented the first formal attempt to develop "generally accepted accounting principles"?

An Introduction to Accounting Theory

Accounting Theory and Accounting Research

The Economics of Financial Reporting Regulation

Postulates, Principles, and Concepts

The Search for Objectives

The Fasbs Conceptual Framework

Usefulness of Accounting Information to Investors and Creditors

Uniformity and Disclosure: Some Policy Making Directions

International Accounting

The Balance Sheet

The Income Statement

Statements of Cash Flows

Accounting for Inflation and Changing Prices

Income Taxes and Financial Accounting

Pensions and Other Postretirement Benefits

Leases

Intercorporate Equity Investments

Filters