Chapter 6 - Normative Theory Framework projects - P3 | Take the Quiz

Which of the following measurement methods is not explicitly recognised in the IASB Conceptual Framework, although it is recognised in the FASB Framework?

A. Current market value

B. Current replacement cost

C. Net realisable value

D. Present value

Which of the following is not a perceived advantage in developing a conceptual framework project?

A. Standard-setters will be less accountable for their decisions

B. Setting accounting standards will be more economical, despite the resources needed to develop the conceptual framework and standards.

C. It will result in a reduced number of accounting standards where issues are covered by the conceptual framework.

D. It will provide a defence and enhance the legitimacy of the accounting profession.

What does the political legitimacy argument, as outlined by Hines (1991), suggest?

A. The accounting profession consists of experts in technical knowledge of accounting and should therefore be given authority to regulate accounting

B. The accounting profession used the development of the conceptual framework as a strategy to promote their self-regulation interests

C. The conceptual framework provides the authority to resolve technical issues with authority and legitimacy.

D. As users are politically involved in developing the conceptual framework, the outcome has political legitimacy.

Which of the following is a characteristic of relevance?

A. It influences economic decisions.

B. It represents faithfully what it purports to represent

C. It provides predictive value and feedback to confirm or correct earlier expectations.

D. None of the given options is correct.

According to the IASB, a conceptual framework:

A. Is a coherent system of concepts that flow from an objective

B. Provides guidance on identifying the boundaries of financial reporting in selecting the transactions, other events and circumstances to be represented

C. Outlines how transactions should be recognised and measured (or disclosed)

D. All of the given options are correct.

In Australia, according to SAC 2 'Objective of General-Purpose Financial Reporting' , the primary user groups(s) of general purpose financial reports are:

A. Resource providers

B. Recipients of goods and services

C. Parties performing a review or oversight function

D. All of the given options are correct.

Over time, a number of objectives have been attributed to information provided within financial statements. Which of the following is not an objective of financial statements?

A. To enable outsiders to assess the stewardship of management

B. To provide information to users that is useful for making and evaluating decisions about the allocation of scarce resources.

C. To enable reporting entities to demonstrate accountability between the entity and those parties to which the entity is deemed to be accountable

D. To help managers to maximise their own wealth and the wealth of the organisation

. Conceptual frameworks provide prescription so they are considered to be:

: A. Normative theories of accounting

B. Positive theories of accounting

C. Decision usefulness theory of accounting

D. None of the given options are correct.

Factors that may indicate a reporting entity include:

A. Separation of management from those with an economic interest in the entity

B. The economic or political importance/influence of the entity to/on other parties

C. The financial characteristics of the entity

D. All of the given options are correct.

Which of the following is an enhancing qualitative characteristics identified by the IASB Conceptual Framework?

A. Comparability and faithful representation

B. Relevance and timeliness

C. Timeliness and verifiability

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Chapter 6 - Normative Theory Framework projects - P3

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