...Score: 1. 60/100 Points 60 % Award: 10 out of 10.00 points Accounting is defined as the process by which financial information about a business is recorded, classified, summarized, interpreted, and communicated to owners, managers, and other interested parties. ✓ True False References True / False 2. Learning Objective: 01-01 Define accounting. Award: 0 out of 10.00 points Which of the following is NOT part of the process of accounting for financial information? Recording Identifying Communicating Classifying References Multiple Choice Learning Objective: 01-01 Define accounting. Learning Objective: 01-06 Define the accounting terms new to this chapter. 3. Award: 10 out of 10.00 points Tax accounting involves tax compliance and tax evaluation. ✓ tax planning. tax configuration. tax obfuscation. References Multiple Choice 4. Learning Objective: 01-02 Identify and discuss career opportunities in accounting. Award: 10 out of 10.00 points A form of the partnerships business entity is ✓ LLP. LLC. INC. DBA. References Multiple Choice Learning Objective: 01-04 Compare and contrast the three types of business entities. 5. Award: 0 out of 10.00 points The Sarbanes-Oxley Act includes rules on auditor retention. auditor reliability. auditor rotation. auditor reporting. References Multiple Choice 6. Learning...
Words: 525 - Pages: 3
...this paper as: Severinson, C. (2010), “The New IAS 19 Exposure Draft”, OECD Working Papers on Finance, Insurance and Private Pensions, No. 5, OECD Publishing. doi: 10.1787/5km7rq4hlw5g-en OECD Working Papers on Finance, Insurance and Private Pensions No. 5 The New IAS 19 Exposure Draft Clara Severinson * JEL Classification: G23, G32, M41, M52 * OECD, France THE NEW IAS 19 EXPOSURE DRAFT Clara Severinson September 2010 OECD WORKING PAPER ON FINANCE, INSURANCE AND PRIVATE PENSIONS No. 5 ——————————————————————————————————————— Financial Affairs Division, Directorate for Financial and Enterprise Affairs Organisation for Economic Co-operation and Development 2 Rue André Pascal, Paris 75116, France www.oecd.org/daf/fin/wp ABSTRACT/RÉSUMÉ The New IAS 19 Exposure Draft At the end of April 2010, the International Accounting Standards Board (IASB) published an exposure draft with proposed changes to International Accounting Standard No. 19 (IAS 19). IAS 19 is the current standard for the financial reporting of company pension obligations that stem from defined benefit (DB) and similar plans. It is required for exchange-listed companies in many parts of the world. If enacted, the changes to IAS 19 proposed by the IASB are expected to have a significant impact on company financials on a global basis. The following paper summarizes the proposed changes as presented in the April 2010 exposure draft and explores some of their implications. This paper does...
Words: 3806 - Pages: 16
...Journal of Accounting and Economics 55 (2013) 66–90 Contents lists available at SciVerse ScienceDirect Journal of Accounting and Economics journal homepage: www.elsevier.com/locate/jae Towards an understanding of the role of standard setters in standard setting$ Abigail Allen, Karthik Ramanna n Harvard Business School, USA a r t i c l e in f o abstract Article history: Received 15 September 2010 Received in revised form 24 May 2012 Accepted 25 May 2012 Available online 7 June 2012 We investigate the effect of standard setters in standard setting. We examine how certain professional and political characteristics of FASB members and SEC commissioners predict the accounting ‘‘reliability’’ and ‘‘relevance’’ of proposed standards. Notably, we find FASB members with backgrounds in financial services are more likely to propose standards that decrease ‘‘reliability’’ and increase ‘‘relevance,’’ partly due to their tendency to propose fair-value methods. We find opposite results for FASB members affiliated with the Democratic Party, although only when excluding financialservices background as an independent variable. Jackknife procedures show that results are robust to omitting any individual standard setter. & 2012 Elsevier B.V. All rights reserved. JEL classification: D72 D78 G18 K22 L51 M41 Keywords: Accounting FASB Politics Relevance Reliability Standard setting 1. Introduction As the Financial Accounting Standards Board (FASB) closes...
Words: 20500 - Pages: 82
...September 16, 13 Financial Accounting Standards Board 401 Merritt 7 PO Box 5116 Norwalk CT 06856-5116 Dear FASB Technical Director, Thank you for your time and efforts to compose the exposure draft on leases to improve the accuracy of financial reporting. As accountants in Boulder Leasing Corporation, we believe that the new accounting models for both lessee and lessor will increase the accuracy of financial reporting by recognizing leasing assets on lessee’s balance sheet and disclosing the value and risks related to residual assets of lessor. However, we show great concerns that the revised exposure draft may lead to potential misstatements of assets and liabilities and users’ difficulty of making decisions. Thus, we hope to elaborate our concerns on how the new exposure draft may influence the following aspects: IDENTIFYING A LEASE We believe that the proposed definition of a lease in the revised exposure draft will greatly eliminate the situations when lessees keep their large amount of operating leasing assets off balance sheet. This change will improve the accuracy of financial reporting by requiring both lessees and lessors to reveal the leased asset on financial statements. The information users can acquire a better understanding and transparency of the leasing transactions from both parties. But the more specific and complicated criteria of identifying a lease in the proposed exposure draft may cause negative impacts for users of the financial reporting...
Words: 907 - Pages: 4
...Group 1 ACCT 5321.001 Dr. Martin Taylor FASB/IASB Exposure Draft on Leases The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) published comment a revised Exposure Draft on Leases on May 16th, 2013 and closed on September 13th, 2013. Based on this exposure, two boards claimed that the existing financial reporting of leasing activities fails to meet the needs of users of financial statements. While the existing accounting principles require to record the leased assets and liabilities on the lessee’s financial statements under capital/finance lease but not under operational leases, the new approach would require a lessee to recognize assets and liabilities for all leases with a maximum possible term (including any option to extend) of more than 12 months. This new approach also changes lessor accounting that it more accurately reflect the leasing activities of different lessors. The boards received 786 comment letters in response to the 2010 Exposure Draft from entities and organizations from many industries, including nonpublic entities. Some respondents supported the effects of the proposed model, some respondents disagreed with the lessor accounting proposals. The reasons are that it was not consistent with the single accounting model proposed for lessees; it did not support the performance obligation approach; and the existing lessor accounting requirements still work well in practice. Respondents also concerned with...
Words: 332 - Pages: 2
...“Disclosure of Certain Contingency Losses” Exposure Draft Critique Contingencies refer to existing conditions, situations, or sets of circumstances involving uncertainty as to possible gains or losses to an entity that will ultimately be resolved when one or more future events occur or fail to occur (ASC Glossary). The Financial Accounting Standards Board (FASB) issued an exposure draft in July 2010 relating to additional disclosures relating to certain loss contingencies. FASB argues the necessity of this proposal arises from concerns of investors and other financial statement users relating to disclosures about loss contingencies under the existing guidance. Proponents argue that existing guidance does not provide adequate information to assist users in assessing the likelihood, timing, and magnitude of future cash outflows associated with loss contingencies (Exposure Draft, 1). Although the exposure draft intends to improve financial statement transparency, the balance between “issuing an improved standard must be maintained against possible prejudicial impacts that could adversely affect a company and its investors” (pwc.com) The first issue of the exposure draft relates to amounts that must be disclosed based on expert testimony. The exposure draft proposes the requirement of disclosing estimated amounts of reasonably possible and remote losses based on the testimony of an expert witness (Chadbourne and Park LLP). This disclosure is flawed and may be misleading...
Words: 783 - Pages: 4
...1. Describe the process by which the accounting standards are set in Singapore. Within the jurisdiction of Singapore, the task of prescribing accounting standards comes under the purview of the Accounting Standards Council (ASC). The ASC receives its mandate from the Accounting Standards Act, which came into effect on 01 Nov 2007. It is responsible for prescribing accounting standards for companies, charities, cooperative societies and societies in line with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). The formulation of accounting standards in Singapore follows a formal and rigorous process that comprises four successive stages—namely exposure, reviewing of comments, post exposure and Issuance of final standards. Exposure Stage The exposure stage is triggered in response to the IASB issuing an Exposure Draft (ED) on new IFRS; amendments to existing IFRS, International Accounting Standard (IAS); a draft Interpretation of the International Financial Reporting Interpretations Committee (IFRIC) or amendment to an existing Interpretation. ASC proceeds to issue its own ED on the proposed equivalent FRS (ED FRS) or draft Interpretation (ED INT FRS) for public comments. Extensive effort is also expended to proactively seek feedback from about 50 interested parties, comprising industry associations, Governmental bodies, listed companies, banks, securities firms and academic institutions. The ASC may also...
Words: 1500 - Pages: 6
...revenue are clarified by the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) when both of the boards have affiliated. The boards are forming a new model to improve financial reporting by providing clearer guidance on when an entity should recognise revenue, and by reducing the number of standards to which entities have to refer. History of Australia’s policy before the adoption of IFRS In July 2004, the AASB 118 was issued. AASB 118 Revenue is equivalent to IAS 18 of the same name as issued by the International Accounting Standards Board. AASB 118 has a specific purpose which was to recommend the accounting treatment of revenue from certain types of transactions. Entities are allowed to practice the standard for yearly reporting periods which begins on or after 1 January 2005. Paragraphs 9 and 30 were amended by AASB 2007-2 and was applicable to annual reporting periods on or after 28 February 2007, whereas AASB 2007-4 amended paragraph 21 and was applicable from 1 July 2007; both of which considers early adoption from 1 January 2005. Amendments regarding the disclosure of information about segment assets in AASB 8 and in AASB 118; which was acting as a principal or agent were made in May 2009 by the AASB 2009-5 Amendments to Australian Accounting Standards that stimulated from the Annual Improvements Project. Finally in October 2010, AASB 2010-5 Amendments to Australian Accounting Standards made editorial amendments to AASB...
Words: 1041 - Pages: 5
...EXPOSURE DRAFT “REVENUE FROM CONTRACTS WITH CUSTOMERS” Name Institution Honest & Blonde Address Telephone number TeleFones4U Address: Telephone number: 7 October 2014 Exposure Draft, “Revenue from Contracts with Customers” Dear Sir, It is our pleasure to provide our response and comments on the new exposure draft, which is on “revenue from contracts with customers” that was published by the FASB (Financial Accounting Standards Board) in the year 2011. TeleFones4U being one of the biggest telecommunication industry, it is with our great concern to bring your attention to some of the critical points in the new exposure draft. One of the concerns is based on the impact of the proposed revenue recognition model. As a business entity just like any other business firm, it is of our great interest to comment on the implication of this new model on the reliability of our financial information. From the new model, TeleFones4U plus other telecommunication operators are required to comply with proposed transactional price reallocations as well as the cost of acquiring contracts. These issues will have great negative impacts on our business as a telecommunication operator. These concerns are as illustrated below: a) Inquiry for further clarification as well as guidance b) Allocation of discount c) The basis for allocation d) Contract acquisition cost Checking on the feedbacks that have been provided by other telecommunication operators, it is clear...
Words: 2493 - Pages: 10
...Abstract There are many issues surrounding fair value accounting, this assignment concerns about the discussion of fair value measurement under both the International Accounting Standard Board (IASB) and US national standard-setter, the Financial Accounting Standards Accounting (FASB). So far, IASB and FASB have created a uniform framework for how to measure fair value for entities around the world. By publishing IFRS 13 Fair Value Measurement, the IASB established a single source of guidance under IFRS for all fair value measurements. After searching relevant sources from financial books and economic websites, some of the issues about fair value accounting have been clarified and analysed. This assignment provides a better understanding of the joint work between IASB and FASB, the definition of fair value under both standards, the relevant issue about IFRS 13 and why accounting differences exist. A. Explain the purpose of the Memorandum of Understanding between the IASB and the US national standard-setter, the Financial Accounting Standards Board (FASB). Theoretically, A Memorandum of Understanding is a document that involved a bilateral or multilateral agreement between parties (Wikipedia 2011). In this particular research essay, the Memorandum of Understanding is a convergence process that both the International Accounting Standard Board (IASB) and US national standard-setter, the Financial Accounting Standards Accounting (FASB) would take steps to balanced the reciprocal...
Words: 3705 - Pages: 15
...Relationship between the IASB and the FASB ACC 541 Relationship between the IASB and the FASB The United States plays an enormous influence on the accounting standards set forth throughout the world in the global economy. The United States follows the Financial Accounting Standards Board (FASB) which has created a large number of accounting standards that are interpreted and accepted by international companies and by the International Accounting Board (IASB). The IASB plays a similar role like the FASB for the rest of the global economy. The IASB is located in London, England and is an independent, privately funded accounting standard-setter. The IASB board consists of members from nine different countries with the IASB’s sole purpose to ‘achieve convergence in accounting standards throughout the world’ (Cellucci, 2011). The IASB and FASB have been collaborating since 2002. This collaboration was derived to create a convergence of the United States Generally Accepted Accounting Principles (GAAP). The convergence project started when the two organizations met during a joint meeting in Norwalk, Connecticut on September 18, 2002. The two board’s goal for the convergence project was for developing a high-quality compatible accounting standards that can be used for both domestic and cross-border financial reporting. They also promised to use their best efforts to make their existing financial reporting standards compatible as soon as practicable and to coordinate their...
Words: 1324 - Pages: 6
...IFRS Income Tax Accounting IFRS for SMEs: A less taxing standard? On July 9, 2009, the IASB published the International Financial Reporting Standard for Small and Medium-sized Entities (“IFRS for SMEs” or “the standard”), a self-contained standard of about 230 pages designed to ease the burden of IFRS reporting for entities that do not have public accountability. Globally, more jurisdictions may be encouraged to replace existing local GAAP with IFRS for SMEs. As a result, it holds important implications for US companies with multinational subsidiaries. The United Kingdom Accounting Standards Board (UK ASB), for example, has already issued a Consultation Paper asking for comments on its proposal to replace existing UK GAAP with IFRS by 2012. 2 PricewaterhouseCoopers Overview of Income Tax Accounting Treatment The Income Tax section of IFRS for SMEs contains several key provisions from the IASB’s Exposure Draft to amend IAS 12 Income Taxes (the “Exposure Draft”). For example, IFRS for SMEs includes the guidance in the Exposure Draft for tax basis, uncertain tax positions and the use of a valuation allowance. IFRS for SMEs also includes several provisions from the existing standard, such as intraperiod allocation, tax rates to apply to distributions and balance sheet classification. A closer look at the provisions in the standard provides insight into the potential for increased complexity and diversity in some areas. Tax basis Under IFRS for SMEs, the tax...
Words: 2378 - Pages: 10
...September 2005 Katherine Schipper, Financial Accounting Standards Board The views expressed in this presentation are my own, and do not represent positions of the Financial Accounting Standards Board. Positions of the Financial Accounting Standards Board are arrived at only after extensive due process and deliberation. 2. Overview Financial reporting topics Exposure draft, Business Combinations (joint with the IASB) Exposure draft, Consolidated Financial Statements, Including Accounting and Reporting of Noncontrolling Interests in Subsidiaries (a replacement of ARB 51) Fair value measurement Proposals for optional fair value measurements Exposure draft, Accounting for Uncertain Tax Positions, an interpretation of SFAS 109 Performance reporting Share based payment (SFAS 123R) 3. Joint IASB-FASB project on business combinations Intent => replace SFAS 141 and converge with international standards Will include mutual enterprises Will include acquisitions of businesses through means other than a purchase of net assets or equity interests A separate project is addressing business combinations involving not-for-profit organizations General principle: recognize assets acquired and liabilities assumed in a business combination at fair value Exceptions : income taxes, benefit plan obligations, operating leases Departure from the cost-based provisions in APB 16, which also appeared in SFAS 141 as originally issued Joint IASB-FASB Exposure Draft is available at the FASB’s website ...
Words: 3971 - Pages: 16
...FAIR VALUE MEASUREMENT: IMPLEMENTATION ISSUES AND CHALLENGES (PART 1) (by Tuam Kwok Choon and Ng Kean Kok) INTRODUCTION Since the promulgation of fair value accounting by the International Accounting Standards Board (IASB), the subject matter has been hotly debated by industry players and professionals of the accounting fraternity the world over. Many problems and pitfalls have been highlighted on the "mark-to-market" premise. For example, David Gwilliam and Richard H.G. Jackson (2008) noted that Enron "was able to 'monetize' physical assets so as to bring them within the remit of mark to market accounting", suggesting misuse of fair value measurement. Fair value is said to be superior to other forms of measurement because it is easily understood by investors and stakeholders. It is also timely, neutral, representationally faithful, reliable, relevant, comparable and consistent. Fair value reporting is deemed to be more transparent and investor-confident. However equally important is that fair value measurement is subject to constraints such as human judgment, the location and condition of the asset/liability being measured, the determination of market, the most advantageous market value as against the entity's perspective, transaction price presumption (exit price verses entry price in different markets), the bid-ask spread of financial instsruments, and transportation cost exclusion, to name a few. Brief definition of fair value: Defined as, “The price that would be received...
Words: 2356 - Pages: 10
...Auditor’s Responsibility for Assessing Going Concern In auditing, going concern is identified as an entity’s capability to continue operating as a business entity. It is the auditor’s responsibility to evaluate the company’s financial statements to assess whether or not the going concern assumption is appropriate. An entity is obligated to include a disclosure in the footnotes of the financial statement stating if there is substantial doubt of the company to continue as a going concern. According to the Public Company Accounting Oversight Board, AU 341 describes the requirements for the auditor’s evaluation of an entity’s going concern. This standard states that an auditor’s responsibility is to evaluate if there is substantial doubt about an entity’s capability to carry on as a going concern for the next year. The period of substantial doubt is not to exceed twelve months. This evaluation is based upon any evidence that he or she has accumulated during the normal course of the audit. If there is substantial doubt about an entity’s ability to continue as a going concern for a reasonable period of time not to exceed one year, the auditor should review management’s plan to remedy the problems. If the substantial doubt goes unresolved, the auditor should add an explanatory paragraph to the audit report. In the event that an auditor receives a request to reissue his or her evaluation of going concern and remove the explanatory paragraph, one can refer to the PCAOB’s...
Words: 5831 - Pages: 24
