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| Section | Weight | Objectives |
|---|---|---|
| Application of specific accounting standards | 22% | - Current and deferred income tax accounting - Foreign currency transactions and translation - Intangible assets and journal entries - Revenue recognition and ledger reconciliation |
| Business combinations | 13% | - Consolidated financial statements - Accounting issues for business combinations - Impairment and journal entries - Goodwill measurement and disclosure - Non-controlling interest and control concepts |
| The accounting theory | 15% | - Agency and contracting theories - Historical cost vs other valuation methods - Recognition criteria per conceptual framework |
| Financial statements | 15% | - Discrepancy detection and correction - Statement of profit or loss and other comprehensive income - Statement of cash flows - Statement of financial position |
| The financial reporting environment | 25% | - Accounting standards and policies - Users and developments impacting reporting - Conceptual framework and elements of financial statements - Accounting regulation and GAAP/IFRS - Types of business entity and structure - Role of International Accounting Standards Board - Regulatory environment and reporting requirements |
| Analysis of financial statements | 10% | - Limitations of financial statement analysis - Financial ratio calculation and interpretation |
1. Variations in the regulatory regime over financial reporting in different countries is attributable to a range of differences including
A) the extent to which the country has adopted international financial reporting standards and the requirements of local securities exchange.
B) the needs of investors, creditors, employees, lending institutions and taxation authorities.
C) company structures, ownership, local culture and the level of development of the country.
D) consumer laws, taxation requirements and the extent to which the country has adopted international financial reporting standards.
2. Which one of the following financial statements helps provide information about factors that might affect an entity's liquidity or solvency?
A) statement of profit or loss and other comprehensive income
B) notes to the financial statements
C) statement of changes in equity
D) statement of cash flows
3. The International Accounting Standards Board's Conceptual Framework for Financial Reporting for the preparation and presentation of financial statements is concerned with the information needs of most users, but not for each possible user.
Which one of the following stakeholders would not be one of the users that the Conceptual Framework is concerned about?
A) potential investors in the company
B) members of the public who have small investment holdings in the company
C) a company's executive management
D) governments and regulatory bodies
4. Which one of the following is a benefit of developing financial reporting standards using a conceptual framework?
A) A financial reporting environment based on standardised principles would be created.
B) The interpretation of non-financial information is made easier.
C) The interpretation of financial reporting standards by anybody would be easy.
D) The financial statements based on these standards would be error-free.
5. Which one of the following shows whether the financial statements of a company show a true and fair presentation of the financial performance of the company?
A) Corporate Governance Statement
B) Statement of cash flows
C) Director's Report
D) Auditor's Report
Solutions:
| Question # 1 Answer: C | Question # 2 Answer: D | Question # 3 Answer: C | Question # 4 Answer: A | Question # 5 Answer: D |
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