Question 1

Which is not a significant change to the U.S.reporting infrastructure that would support the move to IFRS?
A)To solely focus on impact on public companies
B)To train and educate issuers,regulators,auditors,and investors about IFRS
C)To transition auditing standards
D)To adjust regulatory and contractual arrangements

Accepted Answer

Focusing solely on public companies would be a limited approach and would not address the broader implications of the move to IFRS, such as the impact on private companies or international investors. The other options (B, C, and D) all involve significant changes to the reporting infrastructure that would be necessary to support the transition to IFRS.

Question 2

Which is not a goal of the convergence project by the FASB and IASB?
A)To make their existing financial reporting standards fully compatible as soon as is practical
B)To coordinate future work programs to ensure that once achieved,compatibility is maintained
C)FASB and IASB should have one joint commitment of cooperation
D)All U.S companies need to take IFRS as the accounting standards

Accepted Answer

The convergence project aims to make existing financial reporting standards fully compatible and coordinate future work programs. However, the goal is not to make all U.S companies adopt IFRS as the accounting standards. The FASB and IASB have indicated that adoption of IFRS by U.S companies will be a separate decision taken by the SEC in the future.

Question 3

How has the AICPA promoted the adoption of IFRS?
A)Recommended that the SEC move immediately to allow optional adoption of IFRS by U.S.companies
B)Supported the goal of a single set of high quality,comprehensive financial reporting standards to be used by public companies of transparent and comparable financial reports throughout the world
C)Reported that a majority of its members have at least a basic knowledge of IFRS and support this position.
D)All of the above

Accepted Answer

The AICPA has taken multiple steps to promote the adoption of IFRS, including recommending that the SEC allow optional adoption, supporting the goal of a single set of standards, and reporting on its members' knowledge and support for IFRS.

Question 4

Resolution of which milestones)is the most important hurdle to be achieved before the SEC moves forward?
A)Sufficient development and application of standards
B)Independence funding of the IFSC Foundation and the standard setting process
C)Human capital readiness
D)A and B

Accepted Answer

Both milestones A and B are crucial for the SEC to move forward. Sufficient development and application of standards is important to ensure that the IFSC Foundation can effectively regulate and enforce compliance. Independence funding of the IFSC Foundation is important to assure the credibility and impartiality of the standard setting process. Human capital readiness is also important, but it is not sufficient alone to address the challenges of establishing and regulating a new regulatory regime.

Question 5

The 2011 roundtable was attended by:
A)bigger public firms and investors.
B)smaller private firms,regulators,and investors.
C)smaller public firms,regulators,and investors.
D)none of the above

Accepted Answer

The 2011 roundtable included smaller public firms, regulators, and investors, indicating a focus on the concerns and regulatory environments affecting these groups.

Question 6

Which is not a step of developing IFRS in the process?
A)The IASB and staff set an agenda of possible issues to be addressed by IFRS.
B)A discussion paper DP)is prepared only for IASC committee review.
C)After considering all comments and additional proposals to its DP,the board may issue an exposure draft ED)
D)IASB may publish a final IFRS to be considered for adoption in the various jurisdictions

Accepted Answer

A discussion paper (DP) is not only prepared for IASC committee review, but it is also issued for public comment and feedback. This feedback is considered by the IASB while developing the Exposure Draft (ED) and ultimately the final IFRS.

Question 7

Which international organization began the movement toward international accounting standards?
A)International Accounting Standard Committee IASC)
B)International Federation of Accountants IFAC)
C)International Financial Reporting Interpretation Committee IFRIC)
D)Standards Advisory Council SAC)

Accepted Answer

The International Accounting Standard Committee (IASC) began the movement toward international accounting standards. It was established in 1973 and was replaced by the International Accounting Standards Board (IASB) in 2001.

Question 8

Which is the primary concern over the adoption of IFRS?
A)The effect on smaller public companies
B)The effect on bigger public companies
C)The effect on smaller private companies
D)The effect on bigger private companies

Accepted Answer

The primary concern over the adoption of IFRS is its effect on smaller public companies. Small companies may not have the resources to comply with the new standards and may face difficulties in financial reporting, leading to higher costs and potential negative impact on their business. On the other hand, larger companies often have more resources to adapt to the changes, thus making the effect less significant. Private companies are not required to follow IFRS, so their concerns are not a primary concern.

Question 9

Which point supports the use of IFRS by U.S.public companies?
A)IFRS presents opportunities for global U.S.companies to lower costs through standardization of financial reporting,centralization of processes,improved controls,and better cash management
B)Adoption of IFRS results in improvements in liquidity,valuation for companies because the company can interpret the IFRS standards for their own benefits
C)U.S.companies' competitiveness are strengthened in global capital markets even though the use of IFRS may increase their cost of capital
D)IFRS is more attractive for public companies than non-public companies

Accepted Answer

This point supports the use of IFRS by U.S. public companies by highlighting the potential benefits of cost reduction, improved processes, and better cash management through standardization of financial reporting.

Question 10

Which country is the only major country not to formally commit to the adoption of IFRS?
A)Japan
B)Australia
C)Brazil
D)U.S.A

Accepted Answer

The United States is the only major country that has not formally committed to the adoption of IFRS. While the Securities and Exchange Commission (SEC) has allowed foreign companies to file financial statements using IFRS since 2007, US companies are still required to use Generally Accepted Accounting Principles (GAAP). However, the SEC has been working towards potentially allowing or requiring US companies to adopt IFRS in the future.

Question 11

Which is not a characteristic of IFRS?
A)Transparency
B)Lowering operational risks
C)Comparability
D)Financial improvement

Accepted Answer

The answer of Which is not a characteristic of IFRS?
A)Transparency
B)Lowering...

Question 12

What is the appropriate reason why people object to adopting the roadmap?
A)FASB is applicable to broadly concerned with both public and private companies,whereas the IASB is public companies
B)IASB provide funds to accounting authorities and depend on their decisions to create IFRS
C)The SEC roadmap does not present,in sufficient detail,the methodology and criteria expected to be applied in assessing the adequacy of IFRS
D)Even though the comparability of financial statements prepared under IFRS can enhanced due to consistency in most international countries,judgments that are influenced by former country standards

Accepted Answer

The objection to adopting the roadmap is that it does not provide enough detail on methodology and criteria for assessing the adequacy of IFRS.

Question 13

Which inventory method is not allowed under IFRS?
A)FIFO
B)LIFO
C)Lower of Cost and Market Method
D)Periodic inventory method

Accepted Answer

LIFO is not allowed under IFRS. Therefore, the best choice is B. Both FIFO and the lower of cost and market method are allowed under IFRS. The periodic inventory method is also allowed, but it is less commonly used and is generally not recommended due to its lack of accuracy compared to perpetual inventory systems.

Question 14

What is the function of IASCF?
A)Providing supporting funds to professional bodies
B)Receiving official support from relevant regulatory authorities
C)Appointing support committees to the IFAC
D)Creating and issuing the standards of IFRS

Accepted Answer

IASCF is responsible for receiving official support from relevant regulatory authorities.

Quiz 1: Background of IFRS

Which is not a significant change to the U.S.reporting infrastructure that would support the move to IFRS?

Which is not a goal of the convergence project by the FASB and IASB?

How has the AICPA promoted the adoption of IFRS?

Resolution of which milestones) is the most important hurdle to be achieved before the SEC moves forward?

The 2011 roundtable was attended by:

Which is not a step of developing IFRS in the process?

Which international organization began the movement toward international accounting standards?

Which is the primary concern over the adoption of IFRS?

Which point supports the use of IFRS by U.S.public companies?

Which country is the only major country not to formally commit to the adoption of IFRS?

Which is not a characteristic of IFRS?

What is the appropriate reason why people object to adopting the roadmap?

Which inventory method is not allowed under IFRS?

What is the function of IASCF?