Question 14 6 pts The PCAOB conducts annual quality reviews for CPA firms that audit financial statements of more than 100 publicly traded entities. True False Question 15 6 pts The SEC does not require all publicly held company to include an MD&A section in their annual reports. O True False Question 12 6 pts The pragmatic approach to theory development is based on the concept of utility or usefulness. O True False Question 13 6 pts Normative theories attempt to explain observed phenomena. True False Question 10 7 pts Which of the following should be disclosed in the Summary of Significant Accounting Policies? O Composition of plant assets Pro forma effect of retroactive application of an accounting change Method of depreciation O Maturity dates of long-term debt Question 11 6 pts The deductive approach to the development of theory begins with stating certain key definitions and assumptions. True O False Question 8 7 pts Which of the following outcomes of providing accounting information is an attempt to deal with both risks and returns? O Agency theory Efficient markets O Fundamental analysis Capital asset pricing model Question 9 7 pts The primary responsibility for the adequacy of disclosure in the financial statements and footnotes rests with the O Partner assigned to the engagement Auditor in charge of fieldwork Staff who draft the statements and footnotes O Client