1. When it comes to corporate governance many commentators have argued the most important factor is:

a. Code of practice

b. Personal ethics

c. Strong accounting systems

d. Harsh legal penalties

2. Which of the following is NOT a function of the AASB?

a. Participate in the development of international accounting standards.

b. Promoting international accounting standards

c. Enforcing compliance with accounting standards

d. Making accounting standards

3. Agency theory concentrates on:

a. Two agency relationships

b. Three agency relationships

c. Multiple agency relationships

d. One agency relationship

4. Which if the following is an advantage of rules-based accounting standards?

a. Improve representational faithfulness of financial statements.

b. Reduced complexity of standards

c. Can cover most situations.

d. Reduced opportunities for earnings management through judgements

5. Which of the following is NOT an example of corporate governance practice?

a. None of the above, i.e. they are all examples of corporate governance

b. Codes of conduct for directors

c. Formation of a nominating committee to identify potential new directors

d. Requirements the most board directors be independent

6. When it comes to corporate governance many commentators have argued the most important factor is:

a. Codes of practice

b. Personal ethics

c. Strong accounting systems

d. Harsh legal penalties

7. Earning management:

a. Has a range of earnings

b. Is illegal

c. None of the above

d. Is considered to always be harmful to shareholders

8. How does the conceptual framework differ from an accounting standard?

a. The principle in the Conceptual Framework providespecific requirements for a particular area of financial reporting while accounting standards are designed to provide general guidance.

b. The principles in the Conceptual Framework are general concepts while accounting standards provide specific requirements for a particular area of financial reporting

c. The principles in the conceptual framework are specific in nature while accounting standards provide more general requirements for financial reporting.

d. The principles in the conceptual framework are designed to provide guidance and apply to a limited range of decisions relating to the preparation of financial reports while accounting standards apply to a wider range of decisions relating to the preparation of financial reports.

9. Which of the following is NOT a key element of regulation?

a. Regulation should be biased.

b. The exercise of control

c. A restriction of choice

d. An intention to intervene.

10. Is it possible to have different theories on the same topic?

a. No, there can only ever be one explanation or solution.

b. Yes, but there is usually only one explanation and/or solution

c. Yes, there are often many alternative theories on a topic because there are usually many possible explanations and/or solutions.

d. No, it is impossible to have alternative theories on a topic