Topic: The Canadian Financial Reporting Environment

Answer The Following Questions (get all 10 right for a positive review)

Q1: Accurate, timely and fairly presented accounting information helps the capital allocation process in all of the following ways, except:

a) enables investors and creditors to assess the relative risks and returns of investment opportunities.

b) enables managers to attract investment capital.

c) enables managers to channel resources more effectively.

d) has a positive effect on the securities market.

Q2: The major objectives of financial reporting include all of the following except:

a) provide financial information that is useful to users.

b) communicate information about an entity's economic resources.

c) communicate information about claims to resources.

d) communicate information about future plans of the entity.

Q3: All of the following are sources of pressure that change or influence the development of accounting principles and standards except:

a) Securities commissions

b) Canada Revenue Agency

c) Industry associations

d) Individual companies

Q4: Major challenges facing the accounting profession include all of the following except:

a) Timeliness - how to report reliable real-time information.

b) How to manage the CPA organization.

c) Globalization of companies and capital markets.

d) credibility - how to regain public confidence.

Q5: Some foreign countries have reporting standards that are different from standards in Canada for all of the following reasons except:

a) the objectives of financial reporting often differ among countries.

b) the institutional structures are often not comparable.

c) the influence of financial institutions.

d) strong nationalist tendencies may be pervasive and therefore there is reluctance to adopt any one country's approach.

Q6: A company can choose to follow International Financial Reporting Standards (IFRS) or Accounting Standards for Private Enterprises (ASPE).

a) True

b) False

Q7: The main objective of the financial statements is to provide information to investors and creditors.

a) True

b) False

Q8: The board of directors is an internal user of financial statement information.

a) True

b) False

Q9: The term "generally accepted" means either that an authoritative rule-making body in accounting has created a reporting principle in a particular area or that, over time, a specific practice has been accepted as appropriate because it is used universally.

a) True

b) False

Q10: The concept of ethics refers to the standards of conduct by which actions are judged as right or wrong, honest or dishonest, fair or not fair.

a) True

b) False