What would you find on a typical business balance sheet that you would not normally find on a personal statement of net worth? O Assets separated between current and noncurrent. O A total for net asset or net worth. O Debt liabilities. O Property assets. You are reviewing the financial statements of a small trader and have been provided with an independent accountant's report. What should you keep in mind as you review the report? O Reviewed statements are less reliable than statements compiled by external accountants. O Audited statements with qualifications are less reliable than reviewed financial statements. O Company prepared accounts are more reliable than statements compiled by external accountants. O Audited statements with qualifications are less reliable than audited statements without qualifications. Keeping abreast of accounting developments is an important part of a finance professionals role. Which statement describes a legitimate and accurate reason for doing this? O Analysts should have a general interest in accounting practices and to maintain that interest it is helpful to keep up to date. O Keeping track of accounting developments is necessary to fully understand the financial statements. O Only by having knowledge of latest accounting developments is it possible to identify whether a company has made adjustments to its accounting policies. O If you are having a conversation with your client's accountants, they would expect you to be aware of recent developments in their line of work. Which statement explains the move toward a common global financial reporting standard? Established national accounting bodies see the development of international global standards as a means to protect their influence as new emerging economies seek access to international capital markets. O This is a project that has been driven by public institutions, including the International Monetary Fund, the European Union and the United Nations. O Businesses and capital markets are both becoming more global, which requires a global approach to accounting information. O The United States is a driving force in gaining convergence of national standards with US GAAP to enable US companies to have greater access to foreign capital. Mrs. Singh has applied for a loan to expand her business. The loan will be secured on existing business premises together with a personal guarantee, and she has submitted her personal balance sheet to support this. Which item would you exclude in the calculation of her net worth? Her car. O Her business premises. O The outstanding mortgage on her house. O Her credit card balances. You are assessing an investment property owned by a client as security for a loan. Which valuation method would be appropriate for this purpose? O Comparison to recent sales of properties of identical size and age in another part of the country. O The present value of estimated future rental income from letting the property. O The amount it would cost to rebuild the property, based on the insured value. O Comparison to recent sales of properties of similar size and condition in the same area. You have been presented with audited financial statements for a prospective new customer. Why is it important that you scrutinize these carefully? O It is not necessary to carry out further scrutiny as long as the accounts are audited and have received an unqualified opinion from the auditors. O Auditors only perform random checks on the audited financial statements so you cannot rely upon those statements without performing further testing yourself. You need to carry out a thorough credit risk in order to understand the impact of current period operations on profits and cash flows. This this will help you to consider the ability of the customer to generate cash to service debt in the future. O Since the discovery of fraud is not an objective of the auditors you will have to carry out a detailed review of the accounts to test for frauds that could impact your lending decision. Which economic grouping of countries mandated IFRS for the group accounts of listed companies through a process of endorsement? O Association of Southeast Asian Nations. O North American Free Trade Agreement. O East African Community. European Union.