Question : 88.The measures used by an organization to provide reasonable assurance : 1259406

 

 

88.The measures used by an organization to provide reasonable assurance that the organization produces reliable financial reports, complies with applicable laws and regulations, and conducts its operations in an efficient and effective manner are collectively referred to as:   

A. Generally accepted accounting principles.

 

B. Financial accounting standards.

 

C. Securities and exchange regulations.

 

D. The internal control structure.

 

 

 

 

89.In 2012 the SEC issued an extensive report regarding the use of IFRS by U.S. public companies and listed which of the following as a major obstacle to adopting IASB standards?   

A. IASB standards are generally viewed as low quality.

 

B. IASB’s dependence on funding from the major accounting firms.

 

C. Cross-border financing is decreasing in popularity.

 

D. The IASB is not a governmental agency and therefore is not positioned to develop accounting standards.

 

 

 

 

90.The basic purpose of audited financial statements is to:   

A. Provide the reporting company with assurance that all assets are protected from theft or embezzlement.

 

B. Prepare financial statements for companies that do not have their own accounting departments.

 

C. Provide users of the financial statements with assurance that the statements are verifiable and are presented in conformity with generally accepted accounting principles.

 

D. Provide both the reporting company and the users of the statements with a written guarantee that the statements are error-free.

 

 

 

 

91.The FASB takes on a responsibility to do the following, except:   

A. Set the objectives of financial reporting.

 

B. Describe the elements of financial statements.

 

C. Judge disputes between management and the CPA.

 

D. Determine the criteria for deciding what information to include in financial statements.

 

 

 

 

92.Which of the following is not recognized as a source of generally accepted accounting principles?   

A. Widespread and long-term use of a particular practice.

 

B. The Financial Accounting Standards Board (FASB).

 

C. The Securities and Exchange Commission (SEC).

 

D. Statements of the Committee of Sponsoring Organizations (COSO).

 

 

 

 

93.In the phrase “generally accepted accounting principles,” the words generally accepted mean that the principles:   

A. Have been adopted by Congress or approved by the voters in a general election.

 

B. Are acceptable to the Internal Revenue Service.

 

C. Are understood and observed by all the participants in the financial reporting process.

 

D. Have been approved by a majority of the members of the Financial Accounting Standards Board.

 

 

 

 

94.Which of the following has the least impact upon the integrity of financial statements issued by publicly owned corporations?   

A. Federal securities laws.

 

B. Professional judgment of the accountants who prepare the financial statements.

 

C. Audits of the financial statements by the Internal Revenue Service.

 

D. Competence and integrity of the CPAs who perform audits.

 

 

 

 

95.Which of the following is true?   

A. The existence of generally accepted accounting principles (GAAP) virtually eliminates the need for professional judgment except in very unusual circumstances.

 

B. Federal securities laws regarding the issuance of misleading financial statements apply not only to the independent auditors, but to management of the company as well.

 

C. Attaining a passing score on the part of the Uniform CPA Examination that covers professional ethics is evidence of integrity and commitment to ethical conduct.

 

D. A professional accountant should resign his position rather than become involved in the distribution of financial statements indicating insolvency.

 

 

 

 

96.Which organization best serves the professional needs of a CPA?   

A. FASB.

 

B. AICPA.

 

C. SEC.

 

D. AAA.

 

 

 

 

97.An accounting principle must receive substantial authoritative support to qualify as generally accepted. Among the organizations and agencies that have been influential in the development of generally accepted accounting principles, which of the following has provided the most influential leadership?   

A. Internal Revenue Service.

 

B. Institute of Management Accountants.

 

C. Financial Accounting Standards Board.

 

D. New York Stock Exchange.