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Multiple Choice Quiz
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1
Which of the following is not a reason why differences in accounting standards between countries have been receiving greater attention in recent years?
A)A shift from controlled to market-driven economies
B)Substantial growth in the size and number of domestic corporations
C)A shift to a global capital market
D)Improvements in computer and communication technology are facilitating international trading and investing
2
Which of the following is least likely to be a factor that influences a country's accounting standards?
A)The role of taxation
B)The level of development of capital markets
C)Differing legal systems
D)Volatility of domestic currency
3
Which of the following has not adopted IFRS as their reporting standards?
A)Switzerland
B)Australia
C)New Zealand
D)The European Union
4
Under the CICA's strategic plan, Canadian GAAP will be harmonized with IFRS for which of the following types of organizations?
A)Publicly accountable enterprises
B)Non-for-profit organizations
C)Private enterprises
D)All types of enterprises
5
Which of the following is false with respect to the accounting standards used in Japan?
A)Accounting principles are established by statute.
B)Accounting income is close enough to taxable income that they do not calculate future income taxes on domestic income.
C)Corporate and securities law requires reporting by means of a balance sheet and an income statement.
D)Business and cultural factors have no influence on the proper interpretation of financial statements.
6
Which of the following is false with respect to financial reporting in the United States?
A)Financial statement presentation in the United States and Canada is virtually the same.
B)U.S. pronouncements are broader and rely more on professional judgment in their application than IFRS standards.
C)Accounting principles in the United States are set by a private organization.
D)In certain areas, the accounting standards of Canada and the United States will create substantial differences in net income.
7
In 1998, a European central bank was established which subsequently issued a common currency called the euro. Which of the following member nations did not adopt the common currency?
A)Germany
B)Denmark
C)France
D)Italy
8
Which of the following statements regarding the adoption of international standards is false?
A)The number of countries adopting international standards has been increasing.
B)Countries that previously had no accounting standards are adopting international standards.
C)Effective in 2005, E.U. companies whose shares trade on stock exchanges must prepare their consolidated financial statements in accordance with international accounting standards.
D)Effective in 2005, all companies whose shares trade on stock exchanges must prepare their consolidated financial statements in accordance with international accounting standards.
9
Which of the following statements best describes the primary reason for the IASB goal of convergence in accounting standards around the world?
(CGA adapted)
A)To enhance the development of the global capital market
B)To compile a list of acceptable accounting alternatives
C)To encourage developing countries to adopt the accounting practices of developed countries
D)To reduce the cost of developing standards for each member country
10
Which of the following best describes the direction the CICA has adopted as their strategic plan?
A)To continue setting its own standards while at the same time consulting with FASB and the IASB.
B)To harmonize the CICA Handbook with U.S. GAAP.
C)To harmonize the CICA Handbook with IFRS.
D)To continue to develop its own standards for all types of Canadian organizations.





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