EBK FINANCIAL ACCOUNTING THEORY AND ANA
12th Edition
ISBN: 9781119299646
Author: CATHEY
Publisher: JOHN WILEY+SONS,INC.-CONSIGNMENT
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Question
Chapter 1, Problem 1.3C
a)
To determine
To state : Role of politicization in formation, operations and demise of ‘Committee on Accounting Procedure (AICPA)’ and ‘Accounting Principles Board (APB)’
b)
To determine
To state : Arguments in support of politicization of accounting standard setting.
c)
To determine
To state : Arguments against politicization of accounting standard setting.
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Which of the following statements about desirable attributes of accounting standards boards is most accurate? Accounting standards boards should: A . concede to political pressures
Some accountants have said that politicization in the development and acceptance ofgenerally accepted accounting principles (i.e., rule-making) is taking place. Some use the term “politicization” in a narrow sense tomean the influence by governmental agencies, particularly the Securities and Exchange Commission, on the development of generallyaccepted accounting principles. Others use it more broadly to mean the compromise that results when the bodies responsible fordeveloping generally accepted accounting principles are pressured by interest groups (SEC, American Accounting Association, businesses through their various organizations, Institute of Management Accountants, financial analysts, bankers, lawyers, and so on).
Instructions(a) The Committee on Accounting Procedure of the AICPA was established in the mid- to late 1930s and functioned until1959, at which time the Accounting Principles Board came into existence. In 1973, the Financial Accounting StandardsBoard was formed and the…
Which of the following is not about harmonization?
Select one:
a. Harmonization is a process of increasing the compatibility of accounting practices.
b. Harmonization simply implies uniformity. A
c. Harmonization is tailored towards breaking the barriers of national differences.
d. Harmonization is a process of preparing financial statements.
Chapter 1 Solutions
EBK FINANCIAL ACCOUNTING THEORY AND ANA
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Similar questions
- What is the Machiavellian approach to decision making? What are some ethical considerations in the reporting of financial results? How do different ethical perspectives potentially impact accounting-based decisions? What is the role of government regulations in producing ethical financial reports?arrow_forwardWhich of the following places more pressure on ethics officers to monitor financial and sales reporting? A B с D E Sarbanes-Oxley Act Federal Sentencing Guidelines for Employees Ethics Officer Responsibility Act Sherman Antitrust Act Enron Financial Responsibility Actarrow_forwardwhat are the reasons financial accounting standards inspire or encourage political action and involvement dring the standard-setting process?arrow_forward
- Choose the correct. Which of the following statements is correct with respect to the IFRS accounting policy hierarchy in situations where a specifically relevant IASB standard dealing with an accounting issue does not exist?a. The IASB Conceptual Framework takes precedence over other IASB standards that deal with related issues.b. The IASB Conceptual Framework takes precedence over standards developed by standard-setting bodies in other countries that deal with the specific accounting issue.c. The most recent specifically relevant pronouncement of any other standard-setting body may be used when neither IASB standards nor the IASB Conceptual Framework provide helpful guidance.d. IFRSs take precedence over IASs and Interpretations in identifying appropriate guidance.arrow_forwardDiscuss whether or not conventional accounting (IASB) framework undermines the presentation of corporate social and environmental reportarrow_forwardSupport for Politicization of rule making for accounting standardsarrow_forward
- Which of the following statements is correct with respect to the IFRS accounting policy hierarchy in situations where a specifically relevant IASB standard dealing with an accounting issue does not exist?a. The IASB Conceptual Framework takes precedence over other IASB standards that deal with related issues.b. The IASB Conceptual Framework takes precedence over standards developed by standard-setting bodies in other countries that deal with the specific accounting issue.c. The most recent specifically relevant pronouncement of any other standard-setting body may be used when neither IASB standards nor the IASB Conceptual Framework provide helpful guidance.d. IFRSs take precedence over IASs and Interpretations in identifying appropriate guidance.arrow_forwardExplain why establishing accounting standards is characterized as a politicalprocessarrow_forwardPositive Accounting Theory seeks to: Select one: a. explain and predict which accounting methods management is likely to select from available choices.C. describe how social relationships are implicated in lobbying by interest groups in accounting standard-setting. b. describe how social relationships are implicated in lobbying by interest groups in accounting standard-setting. c. prescribe which accounting methods should be used in particular circumstances d. formulate an understanding of how accountability to a broader set of stakeholders should be achieved.arrow_forward
- 1.The IASB sets standards for: a. The private sector b. The public and private sectors c.The public, private and not-for-profit sector d. The private and not-for-profit sector 2. Which of these is not one of the benefits of a Conceptual framework? a. Reporting requirements will be more Consistent and logical b. It may allow firms to reduce their reported profit c. The need for specific accounting standards should be reduced d. Standard setting boards will be more accountable for their actionsarrow_forwardThe statement about auditor independence that iThe correct statement regarding the regulation of professional ethics for accountants is: Select one: A. The government is the regulator. B. CPA Australia and the ICAA are the regulators. C. There is co-regulation between the professional bodies and the government. D. There is no current regulation.s true is: Select onearrow_forward3. What are the advantages of rules-based standards? 4. Do you think that future international accounting standards will need to be more principlesbased or more rules-based? Many outside the United States claim that a problem with U.S. GAAP is that there are too many rules. They argue for principles-based accounting standards in which the broad principles of accounting are emphasized and less emphasis is placed on detailed implementation rules. Americans counter that IFRS may lack quality and rigor. Additional rules are necessary to provide adequate guidance to users.arrow_forward
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