Question :
Multiple Choice Questions31. Which of the following tasks does the Securities : 1228510
Multiple Choice Questions
31. Which of the following tasks does the Securities & Exchange Commission (SEC) not perform?
A. Overseeing the work of the Financial Accounting Standards Board (FASB).
B. Overseeing the work of the Public Company Accounting Oversight Board (PCAOB).
C. The responsibility for protecting investors and maintaining the integrity of the securities markets.
D. The development of generally accepted accounting principles.
32. Which of the following tasks does the Financial Accounting Standards Board (FASB) perform?
A. Overseeing the work of the Securities & Exchange Commission (SEC).
B. Overseeing the work of the Public Company Accounting Oversight Board (PCAOB).
C. The responsibility for protecting investors and maintaining the integrity of the securities markets.
D. The development of generally accepted accounting principles.
33. Which of the following are primarily responsible for the information provided in a company’s financial statements?
A. The internal and external auditors.
B. The Securities & Exchange Commission (SEC) and the external auditors.
C. The chief executive officer (CEO) and the chief financial officer (CFO).
D. The external auditors and the board of directors.
34. Which of the following is not a responsibility of the chief executive officer (CEO) and the chief financial officer (CFO)?
A. The responsibility to oversee the financial statement external audit.
B. To ensure the accuracy and completeness of all reports provided to the Securities & Exchange Commission (SEC).
C. The certification of the strength of the internal control system.
D. The disclosure to the auditor committee of any frauds they are aware of.
35. Which of the following is not true about the board of directors?
A. They are elected by stockholders.
B. They ensure the accuracy and completeness of all reports provided to the Securities & Exchange Commission (SEC).
C. They are responsible for ensuring that processes are in place for maintaining the integrity of the financial statements.
D. They are responsible for hiring the company’s external auditors.
36. Which of the following statements is false?
A. The board of directors meets with the external auditors to discuss management’s compliance with their financial reporting obligations.
B. The external auditors are selected by the Securities & Exchange Commission (SEC).
C. The Securities & Exchange Commission (SEC) requires publically traded companies to have their financial statements audited by an independent accountant.
D. The external auditors assume some responsibility with respect to the fairness of the financial statements.
37. For accounting information to be useful, it must be which of the following?
A. It must be consistent and comparable.
B. It must be relevant and reliable.
C. It must be comparable and reliable.
D. It must be relevant and consistent.
38. Conservatism requires that special care must be taken to avoid which of the following?
A. Overstating assets and liabilities and understating revenues and expenses.
B. Understating assets and liabilities and overstating revenues and expenses.
C. Overstating assets and revenues and understating liabilities and expenses.
D. Understating assets and revenues and overstating liabilities and expenses.
39. Which of the following is an objective of the external audit of a company’s financial statements?
A. To provide a forecast of the company’s future earnings.
B. To assure no fraud has been committed by the company’s management.
C. To provide credibility and assurance that the financial statement information conforms with generally accepted accounting principles in all material respects.
D. To detect all accounting errors made by the accounting system and employees.
40. Which of the following describes the conservatism constraint?
A. A business should avoid overstating assets and revenues and avoid understating expenses and liabilities.
B. The benefits of accounting for and reporting information should outweigh the costs.
C. If the dollar amounts involved are large enough to influence a user’s decisions the data is considered to be relevant.
D. The conservatism constraint produces a higher net income and stockholders’ equity.
