Question Details

What is a possible danger if politics plays too big a role in accounting standard setting 



1.	Which of the following is not considered a component of generally accepted accounting principles?
a.	FASB Implementation Guides.
b.	Widely recognized industry practices.
c.	Articles published in CPA journals.
d.	AICPA Accounting Interpretations.

	2.	Financial accounting standard-setting in the United States
a.	can be described as a social process which reflects political actions of various interested user groups as well as a product of research and logic.
b.	is based solely on research and empirical findings.
c.	is a legalistic process based on rules promulgated by governmental agencies.
d.	is democratic in the sense that a majority of accountants must agree with a standard before it becomes enforceable.

	3.	The purpose of the International Accounting Standards Board is to
a.	issue enforceable standards which regulate the financial accounting and reporting of multinational corporations.
b.	develop a uniform currency in which the financial transactions of companies through-out the world would be measured.
c.	promote uniform accounting standards among countries of the world.
d.	arbitrate accounting disputes between auditors and international companies.

	4.	Which of the following is a source of pressure that may influence the accounting standard setting process?
a.	Congress.
b.	Lobbyist.
c.	CPA firms.
d.	All of these answers are correct. 

	5.	What is a possible danger if politics plays too big a role in accounting standard setting ?
a.	Accounting standards that are not truly generally accepted.
b.	Individuals may influence the standards.
c.	User groups become active.
d.	The FASB delegates its authority to elected officials.
 


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