Contemporary Issues in Accounting Exam Solutions
Course Introduction
This course explores current and emerging topics within the accounting profession, focusing on how changes in business environments, regulations, and technology impact accounting practices. Students will examine issues such as international accounting standards, ethics, corporate governance, sustainability reporting, and the influence of digital transformation on financial reporting and auditing. Through case studies and analysis of real-world events, the course encourages critical thinking about the challenges and opportunities facing accountants today, preparing students to navigate the complexities of a rapidly evolving field.
Recommended Textbook
Financial Accounting Theory 4th Edition by Craig
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12 Chapters
359 Verified Questions
359 Flashcards
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Deegan
Chapter 1: Introduction to Financial Accounting Theory
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29 Verified Questions
29 Flashcards
Source URL: https://quizplus.com/quiz/55205
Sample Questions
Q1) Theories and models in the social sciences differ from theories in the pure sciences because:
A) Theories about human behaviour cannot be expected to apply all the time, like some natural science theories.
B) A number of theories may be available to describe, or provide a different perspective on, a particular phenomenon.
C) Not all theories in social science have predictions that can be tested.
D) All of the given options are correct.
Answer: D
Q2) Which of the following is not a description of a paradigm?
A) It is a model for the formulation and resolution of research problems.
B) It is a school of thought or a principle by which a group of researchers operate.
C) It is a collection of unrelated theories.
D) It offers a systematic approach to raise questions and to frame answers.
Answer: C
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3
Chapter 2: The Financial Reporting Environment
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29 Verified Questions
29 Flashcards
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Sample Questions
Q1) Which of the following statements is true about accounting measurements such as profits and assets?
A) They are subject to professional judgment.
B) They would not vary if prepared by different accountants, providing they were based on the same set of accounting standards.
C) They are based on hard, objective, evidence.
D) All of the given options are correct.
Answer: A
Q2) Financial accounting leads to the generation of:
A) Reports to meet the specific information needs of users
B) Monthly financial reports for management
C) Special purpose financial reports
D) General purpose financial reports
Answer: D
Q3) Accounting theories should be:
A) Inductive
B) Deductive
C) Descriptive
D) None of the given options is correct.
Answer: D
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Chapter 3: The Regulation of Financial Accounting
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30 Verified Questions
30 Flashcards
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Sample Questions
Q1) Which of the following best describes the process of setting accounting standards?
A) A technical process where accounting experts determine the most technically correct and logical standards to issue
B) A political process where the constituency affected either socially or economically by a proposed AASB standard has influence on the final outcome
C) An exclusive process where the AASB sets the agenda and determines which standards to issue and what requirements they will contain
D) An inclusive process where standards are proposed from various interested parties for approval by the AASB
Answer: B
Q2) In the absence of regulation,the 'market for lemons perspective' (Arkerlof,1970)assumes that:
A) There is no incentive for firms to disclose bad news.
B) Firms have incentives to disclose both good and bad news.
C) No news is good news.
D) All of the given options are correct.
Answer: B
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5
Chapter 4: International Accounting
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33 Flashcards
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Sample Questions
Q1) Which of the following of Gray's accounting sub-culture values describes a preference for substance over legal form regulation?
A) Professionalism versus statutory control
B) Uniformity versus flexibility
C) Conservatism versus optimism
D) Secrecy versus transparency
Q2) Which of the following is not a characteristic of the Anglo-American model of financial accounting and its regulation?
A) It has been strongly influenced by professional accounting bodies rather than government
B) It emphasises the importance of capital markets as the main source of equity and debt
C) Regulation tends to be totally rule-based rather than requiring professional judgement
D) It emphasises consideration of substance over legal form
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Chapter 5: Measurement Issues: Accounting for the Effects of Changing
Prices and Market Conditions
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29 Verified Questions
29 Flashcards
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Sample Questions
Q1) Which of the following is not a valid criticism of historical cost accounting?
A) It is not relevant in times of changing prices.
B) It is not logical to add assets together that have been purchased in different periods, with dollars of different purchasing power.
C) It understates profit in times of rising prices.
D) It distorts the current year's operating results by including the current year's income, holding gains that accrued in previous periods.
Q2) Which of the following statements about holding gain (cost savings)in the CCA model is false?
A) Unrealised savings include gains (cost saving) from holding inventory that has increased in price, which have yet to be realised.
B) Realised savings relate to cost savings in inventory actually incurred, and gains (cost savings) relate to depreciation actually incurred.
C) Unrealised savings include gains (cost savings) from holding depreciable assets (with higher replacement costs) not yet realised through the process of depreciation.
D) All of the given options are correct.
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Chapter 6: Normative Theories of Accounting: The Case of Conceptual Framework Projects
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Sample Questions
Q1) Which of the following is not a characteristic of a liability,according to the IASB Conceptual Framework?
A) A future deposition or transfer of economic benefits to others will occur.
B) A past transaction or event is to have created the obligation.
C) There must be a legal obligation.
D) None of the given options are correct.
Q2) According to the IASB,a conceptual framework:
A) Is a coherent system of concepts that flow from an objective
B) Provides guidance on identifying the boundaries of financial reporting in selecting the transactions, other events and circumstances to be represented
C) Outlines how transactions should be recognised and measured (or disclosed)
D) All of the given options are correct.
Q3) Which of the following measurement methods is not explicitly recognised in the IASB Conceptual Framework,although it is recognised in the FASB Framework?
A) Current market value
B) Current replacement cost
C) Net realisable value
D) Present value
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Chapter 7: Positive Accounting Theory
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30 Verified Questions
30 Flashcards
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Sample Questions
Q1) The key theory that underpins Positive Accounting Theory is:
A) The Efficient Markets Hypothesis
B) Agency theory
C) Normative ethical theory
D) None of the given options are correct.
Q2) The principal's expectation of opportunistic behaviour by his or her agent results in lower payments to:
A) The agent
B) The principal
C) The principal and the agent
D) Neither the principal nor the agent
Q3) To test whether accounting information is useful,researchers such as Ball and Brown tested whether share prices responded to:
A) Expected earnings announcements
B) Forecast earnings announcements
C) Unexpected earnings announcements
D) All of the given options are correct.
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Chapter 8: Unregulated Corporate Reporting Decisions:
Considerations of Systems-Oriented Theories
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29 Verified Questions
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Sample Questions
Q1) The difference between Positive Accounting Theory and Legitimacy Theory is that:
A) Legitimacy Theory does not rely on the assumption that all action is driven by individual self-interest.
B) Legitimacy Theory makes no assumptions about the efficiency of markets.
C) Legitimacy Theory suggests that organisations have a 'social contract' with society.
D) All of the given options are correct.
Q2) Which of the following statements is false?
A) Legitimacy Theory is derived from 'classical' political economy theory.
B) Legitimacy Theory suggests that organisations will act in a way that society perceives as legitimate.
C) Legitimacy Theory relies upon the notion of the 'social contract'.
D) Legitimacy Theory asserts that organisations will attempt to ensure that society perceives their actions as 'legitimate'.
Q3) Which of the following statements is characteristic of Stakeholder Theory?
A) Stakeholder Theory has both a normative and positive perspective.
B) Stakeholder Theory has neither a normative nor positive perspective.
C) Stakeholder Theory is a normative theory.
D) Stakeholder Theory is a positive theory.
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Chapter 9: Extending Corporate Accountability: The
Incorporation of Social and Environmental Factors Within External Reporting
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29 Verified Questions
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Sample Questions
Q1) 'Sustainable cost' is the amount an organisation must spend to:
A) Maintain its current level of social and environmental performance
B) Return the biosphere to the state it was in at the beginning of the accounting period
C) Sustain its current level of profitability, given increasing societal expectations for improved social and environmental performance
D) Adequately report its financial, social and environmental performance in accordance with the ethical formulation of Stakeholder Theory
Q2) The prevalence of social and environmental reporting is:
A) Declining
B) Increasing
C) Stable
D) None of the given options are correct.
Q3) Social and environment reporting are also referred to as:
A) Sustainability reporting
B) CSR reporting
C) Triple bottom line reporting
D) All of the given options are correct.
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Chapter 10: Reactions of Capital Markets to Financial Reporting
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30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/55196
Sample Questions
Q1) Which of the following statements is true,regarding the Ball and Brown (1968)study?
A) It is the first major capital markets research publication in accounting.
B) It investigated the usefulness of accounting earnings under an historical cost model.
C) It found evidence to suggest that the information contained in the annual report is used in investment decision-making.
D) All of the given options are correct.
Q2) In addition to investigating the information content of earnings announcements,capital markets research has also considered whether:
A) Earnings announcements reflect information previously utilised by investors
B) Abnormal earnings announcements reflect information previously utilised by investors
C) Cash flow announcements reflect information previously utilised by investors
D) Abnormal cash flow announcements reflect information previously utilised by investors
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Chapter 11: Reactions of Individuals to Financial Reporting:
An Examination of Behavioural Research in Accounting
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29 Verified Questions
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Source URL: https://quizplus.com/quiz/55195
Sample Questions
Q1) Behavioural research could be useful to accountants because it could demonstrate the items which should be included in financial reports on the basis that they are:
A) Useful to stakeholders
B) Useful to decision-makers
C) Necessary to discharge management accountability
D) All of the given options are correct.
Q2) Which of the following statements is not true about behavioural research?
A) There can ultimately be a normative component to behavioural research.
B) Behavioural research can be classified as positive research, because it seeks to explain particular actions or behaviours.
C) Behavioural research is typically grounded in organisational theory, and theories from psychology and sociology.
D) Behavioural research is an example of economics-based theories where assumptions about what motivates human actions are made and such motivations are attributed to all individuals.
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