Practice Question 05
Correct! Varied – the SEC relies on FASB to develop standards but gives advice and
recommendations to the private sector as needed.
The role of the Securities and Exchange Commission (SEC) in the formulation of accounting
standards can be best described as
it allows the FASB to develop all accounting standards by itself.
varied – the SEC relies on FASB to develop standards but gives advice and
recommendations to the private sector as needed.
non-existent.
it develops all accounting standards by itself.
Practice Question 06
Correct! As a result of the call for greater regulation after the stock market crash of 1929, the
federal government established the SEC to help develop and standardize financial information
for stockholders.
Which of the following was established by the federal government to help develop and
standardize financial information presented to stockholders?
CAP (Committee on Accounting Procedure).
SEC (Securities and Exchange Commission).
AICPA (American Institute of Certified Public Accountants).
FASB (Financial Accounting Standards Board).
Practice Question 11
Correct! GAAP is as much a product of political action as it is of careful logic or empirical
findings.
Politics play no role in establishing GAAP (Generally Accepted Accounting Principles).
True
False
Practice Question 14
Correct! The International Accounting Standards Board (IASB) issues International Financial
Reporting Standards (IFRS).
International Financial Reporting Standards (IFRS) are issued by the:
SEC (Securities and Exchange Commission).
FASB (Financial Accounting Standards Board).
IASB (International Accounting Standards Board).
EITF (Emerging Issues Task Force).
Pre-Lecture Question 03
Correct! Providing information about the reporting entity that is useful to present and potential
equity investors, lenders, and other creditors is the objective of financial reporting.
Which of the following is the objective of financial reporting? To provide information:
about the reporting entity that is useful to present and potential equity investors, lenders,
and other creditors.
about the management and shareholders of an enterprise.
that defines the process of how and at what cost money is allocated among competing
interests.
used to identify, measure, analyze and communicate financial information needed by
management to plan, control and evaluate a company’s operations.
Post-Lecture Question 05
Correct! Public corporations are required to file audited statements with the Securities
Exchange Commission.
Corporations whose securities are listed on a U.S. stock exchange are required to file audited
financial statements with the Securities Exchange Commission.
True
False