11. Capital market research focuses on the relationship between:

a. Standards setting and accounting information.

b. Capital markets and the economy

c. Accounting information and standards setting.

d. Accounting information and capital markets.

12. Corporate governance is:

a. The system by which corporations are directed and controlled.

b. A coherent system of concepts that underlie financial reporting

c. A set of broad principles that provide the basis for guiding actions or decisions

d. A term referring to managements choosing to voluntary disclose non compulsory information in annual reports.

13. Which of the following earning management reasons would NOT be viewed as a positive for shareholders?

a. To increase short term profits.

b. To meet analyts expectations

c. To avoid violating debt covenants.

d. To accurately convey private information

14. In countries where finance is mainly provided by banks we would expect?

a. More lenient bankruptcy laws.

b. All of the above

c. Greater emphasis on the balance sheet.

d. More public disclosure

15. An advantage of principle based approach to corporate governance is that:

a. All of the options are correct

b. It bans loans to directors

c. It requires a corporation to prepare an annual report and provide them to shareholders.

d. It places a higher level of duty on directors to determine which corporate governance practices are required.

16. 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 that most board directors be independent.

17. Big bath accounting is generally used to drop earnings when:

a. When operations are restricted.

b. All of the above.

c. There is a change in management team

d. There is a change in management team.

e. When the economy is poor.

18. Which of the following examples is NOT advantage of good corporate governance?

a. Increasing the cost of capital.

b. Expanding the companys shareholder base

c. Increased market confidence

d. Reducing perceived risks to investors.

19. Earning are important because:

a. Increased earnings signal an increase in equity value.

b. All of the above.

c. Earnings assist in predicting future cash flows.

d. Earnings are used to assess management performance.

20. Which of the following would be considered fraudulent accounting?

a. Recognising revenue when services are prepaid but only partially performed.

b. Restating useful life and residual value of non-current assets upwards.

c. Liberal credit terms and estimation of provision for doubtful debts.

d. Capitalising advertising costs

21. The three parts of the triple bottom line are:

a. Financial, Customer and government.

b. Economic, environmental and Social

c. Economic, Stakeholder and employee.

d. Financial, Economic and Government.

22. Stakeholder power is general considered to relate to which of the following factors?

a. How vocal they are prepared to be

b. None of these above

c. The degree of control they over resources required by the organisation

d. The amount of impact the organisation has on them.