Contemporary Accounting Issues
Final Exam Questions
Course Introduction
Contemporary Accounting Issues explores the latest developments and challenges in the field of accounting, with a focus on how emerging trends, regulatory changes, and technological advancements impact accounting practices and financial reporting. The course examines topics such as ethical considerations, sustainability accounting, global convergence of standards, digital transformation, and the role of accounting in decision-making for organizations. Students will analyze real-world case studies and recent research to develop critical thinking skills and an in-depth understanding of how contemporary issues shape the accounting profession today.
Recommended Textbook
Contemporary Issues in Accounting 2nd Edition by Michaela Rankin
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12 Chapters
226 Verified Questions
226 Flashcards
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Page 2
Chapter 1: Contemporary Issues in Accounting
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Sample Questions
Q1) Which of the following statements are true?
A)The role of the accountants is changing,due to changes in economic activities,societal expectations and developments in technology.
B)Accounting is not a precise uncontested technical exercise.
C)Financial accounting is principles based and the application of appropriate accounting and reporting requires professional judgement.
D)All of the above.
Answer: D
Q2) Which of the following statements is correct?
A)a theory does not have to be correct to be useful.
B)if there is a theory about something,it must be correct.
C)it is impossible to assess the appropriateness of a particular theory.
D)a theory can only be useful if it is correct.
Answer: A
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3
Chapter 2: The Conceptual Framework for Financial Reporting
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Sample Questions
Q1) Prudence is defined in the Proposed Framework as:
A)making good judgements under conditions of certainty.
B)the exercise of caution when making judgements under conditions of uncertainty.
C)the lack of caution when making judgements under conditions of uncertainty.
D)making poor judgements under conditions of certainty.
Answer: B
Q2) The accounting conceptual framework is what kind of theory?
A)Positive.
B)Abstract.
C)Normative.
D)Emergent.
Answer: C
Q3) Which of the following questions does the Conceptual Framework NOT answer?
A)What type of information should be included in financial reports?
B)Who are financial reports for?
C)What is the purpose of the financial reports?
D)What exact measurement basis should be used in financial reports?
Answer: D
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Chapter 3: Standard Setting
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Sample Questions
Q1) Which of the following groups benefits most from rules based accounting regulation?
A)Shareholders.
B)Managers.
C)Auditors.
D)Accountants.
Answer: C
Q2) One of the advantages of principles-based standard is:
A)They do not improve representational faithfulness of financial statements.
B)They allow for no professional judgement.
C)They are generally simpler.
D)None of the above.
Answer: C
Q3) Which of the following was identified as a benefit when Australia accepted the international harmonisation of its accounting standards?
A)Reporting costs would be lowered.
B)International comparability of financial statements would increase.
C)The cost of capital would decrease.
D)All of the above.
Answer: D
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Page 5
Chapter 4: Measurement
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Sample Questions
Q1) Accounting for the environment is a difficult area because:
A)As a common good it is hard to value the environment.
B)It is difficult to measure the accounting consequences of environmental issues.
C)Environmental issues extend beyond the entity boundary.
D)All of the above.
Q2) Information produced using current cost as the measurement base is considered:
A)More comparable between different companies.
B)Less relevant.
C)Less understandable.
D)All of the above.
Q3) Information produced using fair value as the measurement base is considered:
A)Less Neutral.
B)More relevant.
C)More faithfully represented.
D)All of the above.
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Chapter 5: Theories in Accounting
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Sample Questions
Q1) Which of the following theories have been used to explain voluntary disclosure in the annual report?
A)Institutional Theory.
B)Stakeholder Theory.
C)Legitimacy Theory.
D)All of the above.
Q2) Contingency theory proposes that:
A)Shareholder needs drive accounting system choices.
B)Accounting policies are likely to be consistent within industries.
C)Size is not an important factor when considering management accounting systems.
D)No universally consistent accounting system can apply to all organisations.
Q3) Stakeholder theory:
A)Has both a normative and positive version.
B)Is completely different to legitimacy theory.
C)Focuses on government power.
D)All of the above.
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Chapter 6: Products of the Financial Reporting Process
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Sample Questions
Q1) Legitimacy theory suggests that corporate social disclosure will be used to:
A)Disclose all firm activities,good or bad.
B)Signal deeply held ethical values of the entity.
C)Manage the concerns of key stakeholders.
D)The minimal degree possible.
Q2) AASB 134 Interim Reporting mandates:
A)That interim financial reports should be prepared at least once per year.
B)The minimum contents of interim financial reports.
C)Who must prepare interim financial reports.
D)All of the above.
Q3) Annual reports contain many financial graphics,it has been noted that:
A)They are frequently distorted to improve perceptions of performance.
B)They are mostly unhelpful in summarising data.
C)They are irrelevant to most users.
D)All of the above.
Q4) Which of the following is an argument for more flexible reporting periods?
A)It makes dividend calculation easier.
B)It makes it less attractive for entities to manipulate profits.
C)It enhances comparability.
D)It is widely supported.
Page 8
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Chapter 7: Corporate Governance
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Sample Questions
Q1) When it comes to corporate governance many commentators have argued the most important factor is:
A)Personal ethics.
B)Strong accounting systems.
C)Harsh legal penalties.
D)Codes of practice.
Q2) The OECD Principles of Corporate Governance link manages' remuneration to shareholder interest to address which agency problem?
A)Horizon problem.
B)Risk aversion.
C)Dividend retention.
D)All of the above.
Q3) Which of the following is NOT an example of good corporate governance in relation to shareholders?
A)Provide shareholders with all information made available to directors.
B)Treat all shareholders equally.
C)Have rules that allow shareholders to call extraordinary meetings.
D)All of the above.
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9
Chapter 8: Capital Markets Research and Accounting
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Sample Questions
Q1) Capital markets research focuses on the relationship between:
A)Accounting information and standards setting.
B)Accounting information and capital markets.
C)Capital markets and the economy.
D)Standards setting and accounting information.
Q2) The kind of study used to examine how quickly accounting measures capture changes in the information that is reflected in share prices over a given period is:
A)A qualitative study.
B)An events study.
C)An association study.
D)A normative study.
Q3) Accounting studies testing market efficiency have conclusively found that:
A)Markets are efficient in the long term.
B)Markets are highly efficient.
C)Markets are more efficient in the short term.
D)There is not conclusive evidence about market efficiency.
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Chapter 9: Earnings Management
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Q1) Which of the following is NOT an example of real activities management that could be used to manage earnings?
A)Accelerating sales.
B)Reducing discretionary spending.
C)Adjusting loan loss provisions.
D)Delaying research and development.
Q2) Which of the following components of managerial compensation are thought to most encourage earnings management?
A)Shares or share options.
B)Their base salary.
C)Their cash bonuses.
D)Various perquisites.
Q3) Research into IPOs and earnings management have indicated:
A)The market does discover upwards earning management.
B)Investors expect upwards earning management.
C)Firms do not engage in upwards earnings management.
D)None of the above.
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11
Chapter 10: Fair Value Accounting
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Sample Questions
Q1) AASB 13 Fair Value Accounting has an effective date of:
A)January 2013.
B)July 2005.
C)July 2011.
D)January 2015.
Q2) Traditionally what measurement technique has been most commonly used:
A)Replacement cost.
B)Modified historical cost.
C)Fair value.
D)Sales value.
Q3) Which of the following is NOT a transaction cost that should be considered in the calculation of fair value?
A)Costs associated with marketing the item.
B)Transport costs.
C)Agent's selling fees.
D)None of the above,i.e.they are all transaction costs.
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Chapter 11: Sustainability and Environmental Accounting
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Sample Questions
Q1) In regards to the Global Reporting Initiative (GRI),Which of the following is true:
A)it was launched in 1997 as an initiative to develop a globally accepted reporting framework.
B)it includes 55 core indicators and 29 additional indicators across environmental,economic and social performance areas.
C)it is the most widely recognised and commonly used guidelines for sustainability reporting.
D)all of the above.
Q2) Ethical investment funds might be concerned about how individual companies address climate change because:
A)They believe companies that address environmental risks will perform better in the long run.
B)They believe carbon emissions proxy for economic performance.
C)They don't want to invest money on companies that waste money.
D)None of the above.
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13
Chapter 12: International Accounting
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Sample Questions
Q1) The accounting regulation is heavily influenced by the legal system in which it operates.In Australia laws are based on which legal system?
A)Common Law.
B)Codified Roman Law.
C)Civil Law.
D)Case Law.
Q2) China's acceptance of international accounting standards would be best described as:
A)Harmonisation.
B)Convergence.
C)Adoption.
D)Indifference.
Q3) In Australia IFRSs are required to be used by:
A)All listed entities.
B)Consolidated entities only.
C)All reporting entities.
D)Multinational Entities.
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