IFRS EXAM 1 QUESTIONS WITH
COMPLETE ANSWERS { GRADED A+}
1. What does IFRS stand for?
a. International Financial Reporting Structure
b. International Financial Reporting Standards
c. Intercontinental Financial Reporting Standards
d. Intercontinental Finance Reporting Structure - ✔✔b
2. What is the goal of IFRS? - ✔✔The goal of IFRS is to achieve a single set of
high-quality, common accounting standards used around the world.
3. Identify the correct statement about IFRS usage in the US:
a. IFRS is intended for publicly accountable entities and has not yet been adopted
in the US.
,b. IFRS is intended for non publicly accountable entities and has not yet been
adopted in the US.
c. IFRS is intended for public accountable entities and will be adopted by the US in
2016. - ✔✔a
4. What does IFRS for SMEs stand for and for whom are these standards intended?
- ✔✔IFRS for SMEs stands for International Financial Reporting Standards for
Small and Medium-sized Enterprises. These standards are intended for entities that
do not have public accountability. These standards have been accepted by the
AICPA as an acceptable alternative reporting standard to US GAAP for non-SEC
registrants.
5. Is US GAAP better and of higher quality than IFRS? - ✔✔While this is an
opinion question, it cannot be definitively stated that US GAAP is better or of
higher quality than IFRS or that IFRS is better or of higher quality than US GAAP.
6. US GAAP and IFRS are more alike than different for most commonly
encountered transactions.
a. True b. False - ✔✔a
,7. List one advantage that some could argue that IFRS standard setters had in
establishing international standards. - ✔✔IFRS standard setters had the following
advantages in establishing international standards:
► Being able to obtain a greater amount of global perspective.
► Being able to draw upon the latest standards.
► Being able to remedy perceived problems identified in practice.
► Having an annual improvement process to enhance the clarity and consistency
of IFRS, which allows the consideration of current thinking and practice.
► Being able to focus more intently on a principles orientation.
8. As a general rule:
a. IFRS standards are broader with less rules and with limited interpretive
guidance.
b. US GAAP standards are broader with more rules and with limited interpretive
guidance.
c. IFRS contains underlying principles but is more specific and rules oriented with
far more "bright lines," comprehensive implementation guidance and industry
interpretations.
, d. US GAAP standards contain underlying principles but are more specific and
rules oriented with more "bright lines," comprehensive implementation guidance
and industry interpretations.
e. a. and d.
f. b. and c. - ✔✔e
e. As a general rule, IFRS standards are broader with less rules and with limited
interpretive guidance. US GAAP contains underlying principles as well but is more
specific and rules oriented with far more "bright lines," and comprehensive
implementation guidance and industry interpretations.
Who is the current Chairman of the IASB? - ✔✔Hans Hoogervorst
What is your opinion about the level of US representation on the IASB? - ✔✔The
US representation is too dominant given the fact that the US has not yet committed
to adopt
IFRS. As so many other countries have committed to adoption, the US should have
less of a
"voice" relative to other countries.
COMPLETE ANSWERS { GRADED A+}
1. What does IFRS stand for?
a. International Financial Reporting Structure
b. International Financial Reporting Standards
c. Intercontinental Financial Reporting Standards
d. Intercontinental Finance Reporting Structure - ✔✔b
2. What is the goal of IFRS? - ✔✔The goal of IFRS is to achieve a single set of
high-quality, common accounting standards used around the world.
3. Identify the correct statement about IFRS usage in the US:
a. IFRS is intended for publicly accountable entities and has not yet been adopted
in the US.
,b. IFRS is intended for non publicly accountable entities and has not yet been
adopted in the US.
c. IFRS is intended for public accountable entities and will be adopted by the US in
2016. - ✔✔a
4. What does IFRS for SMEs stand for and for whom are these standards intended?
- ✔✔IFRS for SMEs stands for International Financial Reporting Standards for
Small and Medium-sized Enterprises. These standards are intended for entities that
do not have public accountability. These standards have been accepted by the
AICPA as an acceptable alternative reporting standard to US GAAP for non-SEC
registrants.
5. Is US GAAP better and of higher quality than IFRS? - ✔✔While this is an
opinion question, it cannot be definitively stated that US GAAP is better or of
higher quality than IFRS or that IFRS is better or of higher quality than US GAAP.
6. US GAAP and IFRS are more alike than different for most commonly
encountered transactions.
a. True b. False - ✔✔a
,7. List one advantage that some could argue that IFRS standard setters had in
establishing international standards. - ✔✔IFRS standard setters had the following
advantages in establishing international standards:
► Being able to obtain a greater amount of global perspective.
► Being able to draw upon the latest standards.
► Being able to remedy perceived problems identified in practice.
► Having an annual improvement process to enhance the clarity and consistency
of IFRS, which allows the consideration of current thinking and practice.
► Being able to focus more intently on a principles orientation.
8. As a general rule:
a. IFRS standards are broader with less rules and with limited interpretive
guidance.
b. US GAAP standards are broader with more rules and with limited interpretive
guidance.
c. IFRS contains underlying principles but is more specific and rules oriented with
far more "bright lines," comprehensive implementation guidance and industry
interpretations.
, d. US GAAP standards contain underlying principles but are more specific and
rules oriented with more "bright lines," comprehensive implementation guidance
and industry interpretations.
e. a. and d.
f. b. and c. - ✔✔e
e. As a general rule, IFRS standards are broader with less rules and with limited
interpretive guidance. US GAAP contains underlying principles as well but is more
specific and rules oriented with far more "bright lines," and comprehensive
implementation guidance and industry interpretations.
Who is the current Chairman of the IASB? - ✔✔Hans Hoogervorst
What is your opinion about the level of US representation on the IASB? - ✔✔The
US representation is too dominant given the fact that the US has not yet committed
to adopt
IFRS. As so many other countries have committed to adoption, the US should have
less of a
"voice" relative to other countries.
