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4. Explain the systems development steering committee’s role in selecting the most feasible alternative of systems development. 5. What are the two key parts of the analysis stage in the systems development lifecycle? 6. What are the two perspectives of system design? Explain. 7. Explain in details the three approaches to systems implementation..
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Multiple Choice Questions 1.Thedefinitionofcorporatefailureis: a.Whenacompanybecomesbankruptorinsolvent b.Theappointmentofareceiveroradministrator c.Unclearandill-defined d.Whenacompanydelistsandliquidates 2.CompaniesinAustraliamayonlyentervoluntaryadministrationunderwhatcircumstances? a.Theircreditorsagreeinanon-bindingvote b.Theyareabletopayalltheirdebtsinfull c.Thecourtordersit d.Atleast75%oftheshareholdersagreetoit 3.Thoughtherearemanypotentialcausesofcorporatefailurewhathasbeensuggestedasthecommonunderlyingproblem? a.Changesintechnology b.Economicrecession c.Managementinadequacies d.Changesinimportprotections 4.Whichofthefollowinghasbeenidentifiedasamajorcauseofcorporatefailure? a.Overexpansion b.DominantCEO c.Failureofinternalcontrols d.Alloftheabove 5.Poorfiguresinwhichfinancialstatementisusuallythetriggerofcorporatefailure? a.StatementofComprehensiveIncome–Fallingrevenues b.StatementofFinancialPosition–Increasingliabilities c.StatementofCashFlows–Pooroperatingcashflows d.StatementofChangesinEquity–Increasingretainedlosses 6.WhichofthefollowingisNOTanindirectcostofcorporatefailure? a.Lossofcorporatereputation b.Lossofkeyemployees c.Additionalinterestondebtthatcannotbepaidoff d.Noneoftheabove,i.e.theyareallindirectcostsofcorporatefailure 7.Whichofthefollowingstatementsismostcorrectwhenitcomestopredictingcorporatedistress: a.TheAltmanZ-Scorehasbeenshowntobe90%accurate b.Therearemanymodelsinuse c.Todatetherehasbeennosuccessinpredictingcorporatefailure d.Themajorityofinputsinthemajorityofcorporatedistressmodelsarequalitative 8.IntheAltman’sZ-scoreonefinancialaccountingmeasureappearsin4ofthe5ratiosused,whatisit? a.SalesRevenue b.OperatingCashFlow c.TotalAssets d.NumberofIndependentDirectors 9.OnetestofAltman’sZ-scoreinAustraliafoundthatitssuccessatpredictingfinancialdistresswas: a.Useless,beingnobetterthanguessing b.BelowAltman’soriginalstudy c.AboveAltman’soriginalstudy d.Excellent,almostperfectatpredicting1yearbeforefailure 10.Researchindicatesthatlendersmakingpredictionsofcorporatefailurerelied: a.Almostexclusivelyonaccrualinformation b.Moreonaccrualinformationthancashflowinformation c.Moreoncashflowinformationthanaccrualinformation d.Almostexclusivelyoncashflowinformation .
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6. Compare and contrast the following terms: phishing, pharming, hacking, and social engineering. 7. Give at least three examples of organisational fraud related to accounting information systems. 8. How do professional bodies and codes of ethics help in deterring frauds? 9. Explain the meaning of ‘fraud triangle’. 10.Stajano and Wilson distilled seven recurring behavioural.
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Multiple Choice Questions 1.Whichofthefollowingstatementsregardingtheconceptofauditisnottrue? a.Themostcommontypeofauditisthefinancialstatementaudit. b.Thefinancialstatementauditprovidesanobjectiveopiniononanorganisation’sfinancialstatements. c.Financialstatementauditprovidesabsolutelyguaranteethatthefinancialreportsarefreeofmisstatement. d.Auditingisasystematicprocessofobjectivelyobtainingandevaluatingevidenceregardingassertionsabouteconomicactionsandeventstoascertainthedegreeofcorrespondencebetweenthoseassertionsandestablishedcriteriaandcommunicatingthoseresultstointerestedusers. 2.Thepurposeofthefinancialstatementauditisforuserstobeabletoascertainthe__________and__________ofthefinancialstatementsofanorganisation. a.credibility;reliability b.trustworthiness;accuracy c.correctness;objectivity d.Noneoftheoptionsiscorrect. 3.Theobjectiveoffinancialauditisto: a.enabletheauditortoexpressanopinionastowhetherthefinancialreportispreparedinaccordancewithallapplicablefinancialreportingframeworks. b.enabletheauditortoexpressanopinionastowhetherthefinancialreportispreparedinaccordancewithanapplicablefinancialreportingframework. c.enabletheauditortoexpressanopinionastowhetherthefinancialreportispreparedinaccordancewithanapplicableaccountingstandard. d.enabletheauditortoexpressanopinionastowhetherthefinancialreportispreparedinaccordancewithallapplicableaccountingstandards. 4.Standards Australia has a risk management standard: a.ASA610 b.ISO9000 c.AS/NZSISO31000:2009 d.Noneoftheoptionsarecorrect 5.WhichofthefollowingisnotaresponsibilityoftheBoard,AuditCommitteeandManagement? a.Formulateoverallriskclassifications. b.Understandbusinesslifecycles,businessprocesses,andcriticalsuccessfactors. c.Identifyandclassifyrisks. d.Assessprobabilityofriskandpotentialconsequences. 6.Whichofthefollowingisnotaresponsibilityassociatedwithauditassurance? a.Compareandanalyserisktoleranceandmitigationstrategies. b.Evaluateexistingandnewcontrols,costsandeffectivenessofmonitoringprocedures. c.Defineobjectives,scopeandpriorities d.Assessexposure,reportpositionandrecommendinsurance(ifnecessary). 7.Whichofthefollowingstatementsregardinginternalauditingisnottrue? a.Internalauditingcanimproveanorganisation’soperationsbyprovidingguidanceformanagementdecisions. b.Internalauditingcanimproveanorganisation’soperationsbyprovidingguidanceformoreefficientbusinessoperations. c.Internalauditingisasubjectiveassuranceandconsultingactivitydesignedtoaddvalueandimproveanorganisation’soperations. d.Internalauditingisundertakenbyprofessionalswhoevaluateandimproveanorganisation’sriskmanagement,controlandgovernanceprocessestoaddvaluetotheorganisation. 8.Whichofthefollowingstatementsregardingtheinternalauditfunctionisnottrue? a.Theinternalauditfunctionisnotallencompassing. b.Theinternalauditfunctionincludestheevaluationofcontrolsinbusinessprocesses. c.Theinternalauditfunctionincludestheevaluationofcontrolsininformationsystemsandsystemsdevelopmentprojects. d.Theinternalauditfunctionincludestheevaluationofcontrolsinsystemsdevelopmentprojects. 9.Therelationshipbetweeninternalauditingfunctionandtheorganisation’sexternalauditorscanbedescribedas: a.Competing b.Substitutive c.Enhancing d.Close 10.Theobjectivesoftheinternalauditfunctiondonotvaryaccordingto: a.organisationsize b.organisationcomplexity c.organisationmarketshare d.industrysector .
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11.WhichofthefollowingisafundamentalassumptionofCaptureTheory? a.Peoplerationallyadvancetheirownselfinterest b.Economicmarketsarefragile c.Regulationiscostly d.Theisanefficientmarket 12.WhichofthefollowingisafundamentalassumptionofBushfiretheory? a.Peopleareproactivewhenitcomestoregulation b.Peoplearereactivewhenitcomestoregulation c.Peoplearenotinfluencedbymediawhenitcomestoregulation d.Peopleareapatheticwhenitcomestoregulations 13.WhichofthefollowingisNOTanadvantageofaccountingregulation? a.Increasedefficiencyinallocatingcapital b.Cheaperproductionofaccountingdisclosure c.Reducedlobbyingtoproducefavourableoutcomes d.Increasedpublicconfidence 14.WhichofthefollowingisNOTadisadvantageofregulation? a.Itcanbedifficulttoreverse b.Itleadstostandardisation c.Itcanrestrictcommunication d.Itcanbedifficulttodeterminetheoptimalregulations 15.Researchintoaccountingregulation: a.Isextensive b.Showsthataccountingisindependentofpoliticalinfluence c.Supportscapturetheory d.Looksaftertheinterestsofawiderangeofstakeholders 16.WhichofthefollowinghavebeenblamedfortheGlobalFinancialCrisis? a.Corporategovernancestructures b.Accountingstandards c.Auditor-Clientrelationships d.Alloftheabove 17.Whichofthefollowinggroupsbenefitsmostfromrulesbasedaccountingregulation? a.Managers b.Auditors c.Shareholders d.Accountants 18.Whichofthefollowinggroupshavebeencriticisedfortheirfailuretorespondtoexposuredrafts? a.Auditors b.Academics c.LargeAustraliancompanies d.Analysts 19.WhichofthefollowingwasidentifiedasabenefitwhenAustraliaacceptedtheinternationalharmonisationofitsaccountingstandards? a.Internationalcomparabilityoffinancialstatementswouldincrease b.Thecostofcapitalwoulddecrease c.Reportingcostswouldbelowered d.Alloftheabove 20.WhichofthefollowinghasNOTbeenidentifiedasaproblemwithAustraliaacceptingtheinternationalharmonisationofitsaccountingstandards? a.IFRSstandardstendtobemorecomplex b.Compromisessometimesneedtobemadewhencreatingstandards c.Toofewcountrieshaveadoptedinternationalaccountingstandards d.Noneoftheabove,theyareallproblems .
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Multiple Choice Questions 1.Which of the following problems has contributed to the growth in corporate governance over the past decades? a.Managersusingtheresourcesofthecompanytobenefitthemselves b.Corporationstakingactionsshareholdersconsiderundesirable c.Corporationsmisleadingshareholderstoavoidconsequences d.Alloftheabove 2.Which of the following examples is NOT advantageofgoodcorporategovernance? a.Expandingthecompany’sshareholderbase b.Reducingperceivedriskstoinvestors c.Increasingthecostofcapital d.Increasedmarketconfidence 3.Corporategovernanceis: a.Acoherentsystemofconceptsthatunderliefinancialreporting b.Atermreferringtomanagement’schoosingtovoluntarilydisclose non-compulsoryinformationinannualreports c.Thesystembywhichcorporationsaredirectedandcontrolled. d.Asetofbroadprinciplesthatprovidethebasisforguidingactionsordecisions 4.According to the ‘Anglo-Saxon’ model whose interest should be the focus of corporate governance? a.Employees b.Shareholders c.Community d.Environment 5.WhichofthesecostsisNOTassociatedwithanagencyrelationshipbetween managers and shareholders? a.MonitoringCost b.TaxationLoss c.BondingCost d.ResidualLoss 6.The OECD Principles of Corporate Governance link manages’ remuneration.
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11.Strategic feasibility refers to: a.whethertheproposedsystemcangeneratestrategicbenefits. b.howwelltheproposedsystemalternativemeetsitsstrategicposition. c.howwelltheproposedsystemsdevelopmentalternativefitswiththeorganisation'sexistingoperatingenvironmentandstrategy. d.alloftheoptionsarecorrect. 12.Technical feasibility does not involve: a.assessinghowwelltheorganisation’sexistingtechnologyinfrastructuremeetstherequirementsoftheproposedsystem. b.assessingwhatnewtechnologyisrequiredtomeetthedemandoftheproposedsystem. c.assessingwhethertheorganisationhasenoughtechnologycapabilitytomaintainthesystem. d.assessingdifferentdesignoptionsfortheproposedsystemandweighingthemupagainsttheorganisation'sexistingtechnicalresourcesandtheresourcethatareavailableforpurchase. 13.PERT charts and Gantt charts can be used to analyse: a.financialfeasibility. b.technicalfeasibility. c.schedulefeasibility. d.strategicfeasibility. 14.The task of selecting the most feasible alternative normally rests with: a.boardofdirectors. b.theITdepartment. c.thesystemsdevelopmentsteeringcommittee. d.theoperationmanagers. 15.In many cases, the accountant or internal auditor will have to use logical and physical dataflow diagrams and systems flowcharts to document their systems.
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21.Theauditorperforminganattestserviceis: a.Anexternalauditor b.Aninternalauditor c.Eitheranexternalauditororaninternalauditor d.AnAISauditor 22.InAustralia,ASICfoundthatforthelargestcompanies,auditfeesfrom2010to2011werereducedbymorethan$12million.ASIClaterfindsthatauditqualityhas: a.improved b.unchanged c.compromised d.TheASIChasnotyetarrivedataconclusion. 23.Ifafirmfailedtodisclosebillionsofdollarsinshorttermdebtinitsannualfinancialreportthathasbeendistributedtoshareholders,whoshouldbefoundguilty?(i)Directorsoftheboard.(ii)Internalauditor.(iii)Externalauditor. a.(i)(ii)(iii) b.(i)(ii) c.(ii)(iii) d.(i)(iii) 24.InAustraliaandNewZealand,ASXguidelinesencouragetheappointmentandevaluationofperformanceofexternalauditorstobecarriedoutby: a.ChiefExecutiveOfficer(CEO) b.Boardofdirectors c.Auditcommittee d.ChiefFinancialOfficer(CFO) 25.Goodcorporategovernancerequireseffectivemanagementoversight.Thisoversightdoesnotinclude: a.Internalandexternalnon-financialreporting. b.Internalandexternalaudit c.Oversightofactivitiestocontrolandreportonfraud. d.Noneoftheoptionsiscorrect. 26.Whichofthefollowingstatementsregardinganauditcommitteeisnottrue? a.Anauditcommitteeissetuptooverseeaccountingandfinancialreporting. b.Anauditcommitteehasamandatetocoverawiderangeofassuranceactivitiesincludingthosenotrelatedtofinancialreporting. c.Anauditcommitteeisresponsibleforconsideringtheeffectivenessofthecompany’sinternalcontrolsystem,includinginformationtechnologysecurityandcontrol. d.AllASXlistedcompaniesmusthaveanauditcommittee. 27.TheASXscorporategovernanceprinciplessuggestthattheauditcommitteeshould: a.consistofatleastthreenon-executivedirectorswithanindependentchair b.reviewtheintegrityofthecompany'sfinancialreporting c.overseetheindependenceoftheexternalauditors d.Alloftheoptionsarecorrect. 28.Whichofthefollowingstatementsregardinganauditcommitteeistrue? a.TheAustralianandNewZealandapproachoftheestablishmentofanauditcommitteeislegislatedformandatorycompliance. b.TheUSapproachoftheestablishmentofanauditcommitteeencouragescompaniestofollowbestpractice. c.Theexistenceofanindependentauditcommitteeisrecognisedinternationallyasanimportantfeatureofgoodcorporategovernance. d.Alloftheoptionsarecorrect. 29.Thetypeofauditthatexaminesthesystemofinternalcontrolsandwhethertheyworkisknownas: a.Financialaudit b.Informationsystemsaudit c.ITgovernanceaudit d.Managementaudit 30.AUASBstandsfor: a.AUstralianAuditingStandardsBoard b.AUditingandAssuranceStandardsBoard c.AUstralianAccountingStandardsBoard d.AUditingandAccountingStandardsBoard .
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Multiple Choice Questions 1.What is the key element of the IASB definition of the reporting entity? a.Theexistenceofabroadrangeofuserswhowantinformation b.Thelegalrequirementsofthecountryinwhichtheentityresides c.Theexistenceofinvestorsandcreditorswhocannotdirectlyobtaininformation d.Theexistenceofscarceresources 2.What is NOT one of the key elements of control? a.Ownership b.Variablereturns c.Influenceoverreturns d.Noneoftheabove,i.e.theyareallelementsofcontrol 3.Which of the following is NOT an argument for a standardised annual reporting period? a.Itallowsinvestorstocompareentitiesmoreeasily b.Itisnecessarytocalculateanannualdividend c.Mostbusinessesoperateonanatural12monthcycle d.Variouslawsrequireregularinformationbeproducedbytheentity 4.Which of the following is an argument for more flexible reporting periods? a.Itmakesitlessattractiveforentitiestomanipulateprofits b.Itenhancescomparability c.Itmakesdividendcalculationeasier d.Itiswidelysupported 5.AASB 134 Interim.
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Multiple Choice Questions 1.Measurement in an accounting context involves a.Determiningthequantitiesofassetsheldbyanentity b.Estimatingtheamountstobederivedfromassets c.Apportioningcostsbetweenitems d.Alloftheabove 2.Which of the following is NOT a benefit of measurement in accounting? a.Dissimilaritemscanbeeasilycombinedintomeaningfultotals b.Itmakesinformationmoredecisionuseful c.Itallowsuserstoassesstheperformanceoftheentity d.Itallowsuserstocompareentities 3.Which of the following is NOT a limitation of measurement in accounting? a.Thereislittleagreementonwhatmeasurementmethodsshouldbeused b.Measurementcanbequitesubjective c.Itisimpossibletocompareentitiesoveraperiodoftime d.Therearesomeaccountingitemsthatarenoteasilymeasured 4.Thestatementinrelationtocurrent trends in accounting that is NOT correctis: a.Thereisamovementtowardsa‘fairvalue’approach b.Thereisamovementtowardsamoretraditionalapproach c.Theconceptsofcapitalandprofithavechangedandevolvedovertime. d.Moreemphasisisnowbeingplacedontherelevanceofinformationratherthanitsreliability’ 5.Whichoftheseis NOT acriticismofhistoricalcostaccounting? a.Itisnotobjectiveandisopentomanipulation b.Ithasbeenusedbybusinessovermanycenturies c.Historicalcostoverstatesprofitintimesofrisingprices d.Costinformationisnotalwaysavailable 6.Thestatementthatistruewithrespecttocurrentcostaccountingis: a.Gainsarerecordedonlywhentheassetsaredisposedof b.Holdinggainsarenotincludedincurrentoperatingprofits c.Currentoperatingprofitistheexcessofthecurrentvalueoftheoutputsoldoverthecurrentcostoftherelatedinputs d.Noneoftheaboveistrue 7.Whichoftheseisadefenceofcurrentcostaccounting? a.Itisthemostobjectiveoftheproposedaccountingmethods b.Relevantcurrenteventsoftheaccountingperiodshouldbeaccountedfortomaintaintheusefulnessofaccountinginformationfordecision-making c.Itspecificallyrecognisesfuturetechnologicalchangesinprofitdetermination d.Alloftheabovearedefences 8.Which of the following is NOT anargumentinfavour of exit price accounting? a.Valuingallelementsinthefinancialstatementsattheirmoneyequivalentsprovidesonerulethatcanbeappliedconsistently. b.Thefinancialstatementsareallocation-free c.Ratherthanmeasuringpasteventsthemethodmeasuresthosethatmighthappenifafirmdoessomethingotherthanwhatwasplanned d.Exitpriceaccountinginvolvesreferencestoreal-worldexamplesthereforeitismoregroundedinrealitythanhistoricalcostaccounting 9.Deprival value.
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11.Thefour enhancing qualitativecharacteristics recognised by the conceptual frameworkare: a.Materiality,comparability,timeliness,costversusbenefit b.Relevance,materiality,reliability,comparability c.Understandability,verifiability,timeliness,comparability d.Understandability,costversusbenefit,verifiability,comparability 12.The constraints on financial reporting identified under the conceptualframework are: a.Costversusbenefit b.Timelinessandneutrality c.Understandabilityandmateriality d.Understandabilityandcostversusbenefit 13.Which of the following elements in the financial statement is NOT defined by reference to other elements? a.Equity b.Expenses c.Liabilities d.Income 14.Which of the following are key parts of the definition of an asset? I. Probability II. Control III. Ownership IV..
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21.Which of the following statements is incorrect in relation to critical accounting? a.Itaimstodevelopacriticalunderstandingoftheroleofaccountingprocessesandpracticesinthefunctioningofsocietyandorganisations b.Acriticalunderstandingoftherolethataccountingplayscanbeusedtoengageinchange c.Itaimstocriticallyanalyseinefficientaccountingpractices d.Itaimstodevelopacriticalunderstandingoftheroleoftheaccountingprofessioninthefunctioningofsocietyandorganisations 22.Research in accounting focuses on: a.Issuesrelatedtoaccountingatamacrolevel b.Questionssuchas,whatrolehasaccountingplayedintheriseofcapitalism c.Issueswithinaccountingatthemoremicrolevel d.Thebiggerpicture 23.Research in accounting would not consider the following question: a.Whatmeasurementsarebeingused b.Whatimpactdochangesinspecificaccountingpolicieshaveonshareprices c.Whatmeasuresshouldbeused d.Shouldaccountabilityordecisionusefulnessbethekeygoalofaccounting 24.Which of the following statements are incorrect in relation to capital market research? a.ItwasfoundedbyBall&Brown,andBeaver b.Itisastreamofpositiveaccountingresearch c.Itisastreamofnormativeaccountingresearch d.Itinvestigatedtheuseofaccountinginformationbycapitalmarkets 25.Research that attempts to explain the motivations behind the accounting choices made by managers is: a.Capitalmarketresearch b.Criticalaccountingresearch c.Accountingpolicychoiceresearch d.Internationalaccountingresearch 26.Which.
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41.Theinherentriskassociatedwithanoperatingsystemthatisusedbyamajorstockexchangeis: a.Ordinarilyhigh b.Ordinarilymedium c.Ordinarilylow d.Negligible 42.Theriskthatanerrorthatcouldoccurinanauditareaandcouldbematerial,individuallyorincombinationwithothererrors,willnotbepreventedordetectedandcorrectedonatimelybasisbytheinternalcontrolsystemis: a.Inherentrisk b.Controlrisk c.Detectionrisk d.Incontrollablerisk 43.Thecontrolriskassociatedwithmanualreviewsofcomputerlogsis: a.High b.Medium c.Low d.Negligible 44.Thedetectionriskassociatedwithidentifyingbreachesofsecurityinanapplicationsystemis a.Ordinarilyhigh b.Ordinarilymedium c.Ordinarilylow d.Negligible 45.Failingtodetectafraudulentorerroneoustransactionisanexampleofwhichtypeofrisk? a.Control b.Inherent c.Detection d.Completeness 46.Whentestingusingtestdata,theauditorshould: a.calculatetesttransactionsmanually b.createasampleoftesttransactions c.startfromthesimplestcalculationsandproceedfromthere d.Alloftheoptionsarecorrect. 47.Totestthatthesystemwillprovideanappropriateresponsetoeveryinvalidinput: a.everypossiblepermutationofvalidtransactionsthatcouldbeenteredintothesystemneedstobetested b.everypossiblepermutationofinvalidtransactionsthatcouldbeenteredintothesystemneedstobetested c.everypossiblepermutationofvalidandinvalidtransactionsthatcouldbeenteredintothesystemneedstobetested d.Noneoftheoptionsiscorrect. 48.AuditorsneedtobeimaginativetoidentifyallpossiblepathsthroughtheAIS.Whichofthefollowingsetsoftestdatadotheyuse? a.Historicaltestdatafromsystemsdevelopment. b.Realistictransactionstotestallcomputationalpathsgeneratedbytheauditors. c.RealistictransactionsbasedongoodaccountingpracticethattesttheinterfacebetweentheworkproceduresandtheAIS. d.Alloftheoptionsarecorrect. 49.Theauditprogram: a.Isessentiallyacomputerisedauditingprogramthatisusedtoauditasystem. b.Isessentiallyanauditingproductprovidedbyanauditingfirm. c.Isessentiallyachecklistofallthetestsandotherproceduresthattheauditorintendstocarryout. d.Noneoftheoptionsarecorrect. 50.Whichofthefollowingstatementsregardingcomputerauditingtoolsandtechniquesistrue? a.Anembeddedauditsoftwareisasimperversionofanintegratedtestfacility. b.Amoresophisticatedexampleofembeddedauditsoftwareiscontinuousauditingusingasystemscontrolandreviewfile. c.Generalisedauditsoftwareexaminestransactionsdynamically. d.Generalisedauditsoftwareisnotveryflexible. .
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11.A normative theory is one which: a.Describesorexplainswhatiscurrentlyhappening b.Predictswhatmighthappen c.Prescribesormakesrecommendationsastowhatshouldhappen d.Isoftenreferredtoasanempiricaltheory 12.Which of the following statements is correct in relation to normative theories? a.Normativetheoriesoftenevolveasaresultofresearchperformedinrelationtopositivetheories b.Factsaboutcurrentaccountingpracticearenotconsideredinthedevelopmentofnormativetheories c.Normativetheoriesarenotlikelytoevolvefromtheconsiderationofpositivetheories d.Normativetheoriesalwaysevolveasaconsequenceorresultofpositivetheories 13.A reason why someone may accept a theory without having ‘first hand’ or direct knowledge of the topic are: a.Lackofknowledgeregardingtheauthorityofthesourceofthetheory b.Thetheorymakessenseandfitswithpersonalexperiencesandbeliefs c.Otherpeoplechoosenottoacceptthetheory d.Evidenceexiststhatrefutesthetheory 14.A theory can be proven to be true: a.Ifwearecertainthereareenoughobservationsthatfitorconfirmthetheory b.Regardlessofhowmanyobservationsfitorconfirmthetheory c.Insomecases,butoftentherearenotenoughobservationsthatfitorconfirmthetheory d.Undernocircumstances,becausewecanneverbecertainthatenoughobservationshavebeenmadethatfitorconfirmthetheory 15.What is the best way to use observation to.
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Short Answer Questions 1. What are the two broad areas of responsibility associated with the risk management system? 2. What are the main responsibilities of an audit committee? 3. Good corporate governance requires effective management oversight. What does this oversight include? 4. Can best practices be used during auditing? If so, how? 5. Briefly explain.
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11.WhichofthefollowingstatementsismostcorrectregardingEnvironmental,SocialandGovernanceReports? a.Theyarebecomingmandatoryinanincreasingnumberofcountries b.Theyarenotcurrentlyrequiredinanycountry c.TheyarerequiredaspartoftheIASB’saccountingstandards d.Norwayisleadingthewaywithregardstorequiringreporting 12.WhichofthefollowingisNOTconsideredastakeholderwithpotentialinterestsincorporatesustainability? a.Banks b.Government c.Media d.Noneoftheabove,ie.Theyareallpotentialinterestedincorporatesustainability. 13.Stakeholderpowerisgeneralconsideredtorelatetowhichofthefollowingfactors? a.Theamountofimpacttheorganisationhasonthem b.Howvocaltheyarepreparedtobe c.Thedegreeofcontroltheyhaveoverresourcesrequiredbytheorganisation d.Noneoftheabove 14.Ethicalinvestmentfundsmightbeconcernedabouthowindividualcompaniesaddressclimatechangebecause a.Theydon’twanttoinvestmoneyoncompaniesthatwastemoney b.Theybelievecompaniesthataddressenvironmentalriskswillperformbetterinthelongrun c.Theybelievecarbonemissionsproxyforeconomicperformance d.Noneoftheabove 15.AnEMSisa: a.EmissionsMeasurementScheme b.EcologicalMaintainedSource c.EnvironmentalManagementSystem d.EthicalMissionStatement 16.ISO14001EnvironmentalManagementrequirescertifyingcompaniestoassessenvironmentalperformanceagainst a.Internallydevelopedpolicies,objectivesandtargets b.Industrybenchmarks c.Governmentsetstandards d.Internationallyestablishedvalues 17.TheKyotoProtocol: a.Setsstandardsoncorporatereportingofcarbonemissions b.Commitscountriestoachievingspecificgreenhousegasemissionsreductions c.Forbidstradingingreenhousegases d.Alloftheabove 18.Anemissionstradingscheme: a.Canalsobereferredtoasa‘capandtrade’scheme b.Allowsthetradeofexcessemissionspermits c.Usuallyinvolvessubstantialfinesforexcessivepolluters d.Alloftheabove 19.Asof2012,theIASBprojectonAccountingforCarbonEmissions a.IscompletewiththereleaseofIFRS4 b.IscurrentlyanExposureDraft(ED133/A) c.Iscurrentlypaused d.Doesnotexist 20.Climatechangehastheabilitytoimpactontraditionalfinancialaccountinginwhatway? a.Liabilityvaluation b.AssetImpairment c.Riskdisclosure d.Alloftheabove .
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Multiple Choice Questions 1.Capitalmarketsresearchfocusesontherelationshipbetween: a.Accountinginformationandcapitalmarkets b.Capitalmarketsandtheeconomy c.Accountinginformationandstandardssetting d.Standardssettingandaccountinginformation 2.Oneofthecriticismsofcapitalmarketsresearchis a.Itfocusestoomuchonsocialpreferences b.ItismainlyfocussedonUSdata c.Itisonlynormativeresearch d.Itismainlyqualitative 3.WhichofthefollowingisNOToneofthethreekeyassumptionsunderlyingcapitalmarketsresearch: a.Accountinginformationcanbeusedtoformexpectationsaboutprofitability b.Expectationsaboutprofitabilityinformexpectationsaboutdividends c.Expectationsaboutdividendsdeterminemarketpriceforshares d.Noneoftheabove,i.e.theyareALLassumptionsunderlyingcapitalmarketsresearch. 4.Whichofthefollowingfactorsarecommonlyconsideredbycapitalmarketsresearch? i.Accountingearnings ii.Unexpectedearnings iii.Assetpricing iv.Marketefficiency a.Noneofthem b.i.andiv.only c.i.,ii.andiv.only d.Allofthem 5.Totestwhetheraccountinginformationandcapitalmarketsresearchersexamine: a.Thestatementsofshareholdersabouttheirdecisionstosellshares b.Therelationshipbetweenunexpectedearningsandsharereturns c.Therelationshipbetweenexpectedearningsandsharereturns d.Therelationshipbetweenshareholderexpectationsandshareprice 6.Thekindofstudyusedtoexaminehowquicklyaccountingmeasurescapturechangesintheinformationthatisreflectedinsharepricesoveragivenperiodis: a.Aneventsstudy b.Anassociationstudy c.Aqualitativestudy d.Anormativestudy 7.Informationperspectivestudieshaveshownusthatwhencomparedtosophisticatedinvestors,unsophisticatedinvestors: a.Overreacttogoodnewsandunderreacttobadnews b.Overreacttonews,bothgoodandbad c.Underreacttogoodnewandoverreacttobadnews d.Arelittledifferenttotheirreactions. 8.Ithasbeenfoundthatpricesoftenleadearnings.Whyisthisthoughttobethecase: a.Accountingconservatism'garbles'earningsignalsaboutfirmvalue b.Accountingstatementsarepooratincorporatinginformationabouthumancapitalandotherintangibles c.Accountingrecognitioncriteriaarelessstringentforlossesthanforgains d.Alloftheabove 9.Whatphenomenonhasbeensuggestedasoneofthemostpuzzlinganomaliesinaccountingresearchandcallsintoquestiontheefficientmarketshypothesis? a.Incomesmoothing b.Post-earningsannouncementdrift c.Signallingtheory d.Bigbathwrite-offs 10.Whichofthefollowinghasbeenfoundtosuggestthattheusersoffinancialstatementsareeitherunwillingorunabletounraveltheeffectsofearningsmanagement? a.Managersusingdiscretionaryaccountingtoincreasetheircompensation b.Managersusingincomesmoothingtoincreaseshareprice c.Managementengagingin'bigbath'accounting. d.Alloftheabove .
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Multiple Choice Questions 1.Ethicaltheorieshelpusto: a.Exploretheimplicationsofadecision. b.Betterunderstandtheimplicationsofadecision. c.Beabletojustifyourchoices. d.Alloftheoptionsarecorrect. 2.Anethicaldecision-makingmodelprovidesguidanceon: Introduction a.Howtonavigatedifficultandcomplexissuesinreachinganeffectivesolutionforabusinessproblem. b.Howtonavigatedifficultandcomplexissuesinreachingabestpracticeforanissue. c.Howtonavigatedifficultandcomplexissuesinreachingadecision. d.Alloftheoptionsarecorrect. 3.Ethics can be defined as: a.Asynonymoustermforacountry’slegalsystem b.Rulesthatguideusinoureverydaybehaviour,thoughtsandactions c.Botha.&b.arecorrect d.Noneoftheoptionsarecorrect 4.Howapersonapproachesandrespondstoanethicalissueistermed: a.Ethics b.Morals c.Criticalthinking d.Decisionmaking 5.Theimplicitrulesthatguideusinoureverydaybehaviour,thoughtsandactionsarecollectivelytermed: a.Ethics b.Morals c.Codeofconduct d.Legislation 6.Thefirststepofethicaldecision-makingisto: a.Definetheissue b.Identifytheprinciplesthatcanbeapplied c.Identifythefacts d.Noneoftheoptionsarecorrect. 7.Whichofthefollowingstatementsregardingethicaldecision-makingistrue? a.Thenumberofalternativecoursesofactionshouldberestrictedtoasmallamounttoavoidinformationoverload. b.Whenchoosingfromasetofalternativecoursesofaction,theprimaryprincipleistolookfortheonethatwillminimisethechanceoflegalsanction. c.Eachalternativecoursesofactionneedstobeevaluatedfromtheperspectiveofthedifferentstakeholders. d.Alloftheoptionsarecorrect. 8.Consequentialist theories are also known as: a.Kantianism. b.Teleologicaltheories c.Botha.&b.arecorrect d.Noneoftheoptionsarecorrect. 9.Theexaminationofprinciples,values,dutiesandnorms,theconsiderationofavailablechoicesinordertomakethedecisionandthestrengthofcharactertoactinaccordancewiththatdecisionisreferredtoas: a.Ethics b.Morals c.Beliefs d.Meditations 10.Whichofthefollowingis not astageinethicaldecisionmaking? a.Identifythefacts b.Identifythelawsthatcanbeapplied c.Consideralternativecoursesofaction d.Makeadecision .
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Multiple Choice Questions 1.Which of the following statements is correct in relation to the purpose of theory? a.alltheoriesdothesamething b.theymakesuggestionsanddictatewhatactionmustbetaken c.sometheoriesexplain,whileothersdescribewhatishappening d.theoriesonlymakepredictionsaboutwhatwillhappeninthefuture 2.Accounting theory can be described as: a.description,explanationorpredictionofaccountingpracticebasedonobservationsand/orlogicalreasoning b.asetoffacts,specificinnature,againstwhichaccountingpracticecanbeevaluated c.beingbasedonlyonobservations d.beingirrelevanttothedevelopmentofnewpracticeandprocedures 3.Which of the following statements is correct? a.ifthereisatheoryaboutsomething,itmustbecorrect b.itisimpossibletoassesstheappropriatenessofaparticulartheory c.atheorydoesnothavetobecorrecttobeuseful d.atheorycanonlybeusefulifitiscorrect 4.Is it possible to have different theories on the same topic? a.no,itisimpossibletohavealternativetheoriesonatopic b.yes,thereareoftenmanyalternativetheoriesonatopicbecausethereareusuallymanypossibleexplanationsand/orsolutions c.yes,butthereisusuallyonlyoneexplanationand/orsolution d.no,therecanonlyeverbeoneexplanationorsolution 5.An example of how theory can predict accounting practice is: a.capitalmarkettheory b.assetrecognitiontheory c.agencytheory d.corporatesocialresponsibilitytheory 6.An example of how theory.
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1.TheBrundtlandreportdefinedsustainabledevelopmentas“developmentthat…”: a.allowsallpeopletomeettheirneedstoanequaldegree. b.meetstheneedsofthefuturewithoutcompromisingtheabilityofcurrentgenerationstomeettheirownneeds. c.meetstheneedsofthepresentwithoutcompromisingtheabilityoffuturegenerationstomeettheirownneeds. d.continuesatthecurrentpace,neitherincreasingnordecreasingintotheforeseeablefuture. 2.WhichofthefollowingstatementsaboutIntragenerationalEquityisNOTtrue: a.Itmeansthatfuturegenerationsshouldnothavealowerqualityoflife. b.Itisconcernedwithpovertyandaccesstofood,waterandshelter. c.Itisanimportantcomponentofeco-justice. d.Noneoftheabove,i.e.theyarealltrue. 3.WhichofthefollowingtermsiscommonlyusedtomeanSustainabilityReporting? a.CorporateSocialReporting b.Environmental,SocialandGovernanceReporting c.TripleBottomLineReporting d.Alloftheabove 4.Thethreepartsofthetriplebottomlineare: a.Financial,EconomicandGovernment b.Economic,EnvironmentalandSocial c.Economic,StakeholderandEmployee d.Financial,CustomerandGovernment 5.TheInternationalIntegratedReportingCommitteewasformedbywhichtwobodies? a.NGOandGRI b.UNHCRandIASB c.GRIandA4S d.IASBandFASB 6.Accordingtotheresearchundertakentodate,whatistherelationshipbetweenenvironmentalperformanceanddisclosureofcorporations? a.Poorperformershavepoordisclosure,butnorelationshiphasbeenfoundforgoodperformers b.Goodperformershavegooddisclosure,butnorelationshiphasbeenfoundforpoorperformers c.Poorperformershavegooddisclosure,butnorelationshiphasbeenfoundforgoodperformers d.Researchhasnotdrawnanyclearconclusions 7.TheUN’sPrinciplesofResponsibleInvestmenthavemainbeenadoptedbywhichtypesoforganisations? a.MiningCompanies b.InstitutionalInvestors c.Governments d.Builders 8.WhichofthefollowingisNOTauseforsustainabilityreportsprepareundertheGRIframework? a.Demonstratingorganisationalcommitmenttosustainabledevelopment b.Comparingorganisationalperformanceovertime c.Measuringorganisationalperformancewithrespecttolaws d.Noneoftheabove,i.e.theyareallusesforsustainabilityreportsunderGRI 9.WhichofthefollowingisanEnvironmentalPerformanceIndicatorundertheGRIframework? a.Ratesofinjury b.Impactsoftransport c.Anti-corruptionpolicies d.Noneoftheabove 10.WhichofthefollowingisNOTaLabourPracticesandDecentWorkperformanceindicatorunderGRI? a.Workforcebygender b.Assessmentofproductlifecyclestagesforhealthandsafetyrisks c.Educationandtrainingprogramsinplace d.Noneoftheabove,i.e.theyareallLabourPracticesandDecentWorkperformanceindicators. .
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11.WhichofthefollowingisNOTaconclusionofcapitalmarketsresearch? a.Accountingearningsarepoormeasuresofrelevanteventsthatareincorporatedintoshareprice b.Investorsreactmorequicklytobadnewsthantogood c.Accountinginformationisnotusedbyinvestors d.Forecastsoffutureperformancearecoretovaluation 12.WhichofthefollowingisNOTafindingorassumptionofcapitalmarketsresearch? a.Capitalprovidersconsiderauditorsincreaseaccountinginformationcredibility b.Thequalificationofafinancialreportwillhaveasignificantimpactonshareprice c.Theworkoffinancialintermediariesimpactsonshareprices d.Analysts'earningsforecastsaremoreaccuratethantime-seriesmodelsofearnings 13.Voluntarydisclosuretheorypredicts: a.Increaseddisclosurelowersinformationasymmetry,thusincreasingthecostofcapital. b.Disclosurewillbebiasedbutonaveragecredible c.Shareholderswillalwayswantincreasedandmoreaccurateinformation d.Noneoftheabove 14.Valuerelevancestudiesattempttoassess theroleofwhichqualitativecharacteristicoftheConceptualFramework? a.Relevance b.Faithfulrepresentation c.Relevanceandfaithfulrepresentation d.Noneoftheabove 15.WhichofthefollowingisNOToneofthethreeassumptionsunderlyingvaluerelevanceliterature? a.Accountingearningsarenothighlyassociatedwithequitymarketvaluechanges b.Equityusersarethedominantusersoffinancialreports c.Sharepricesadequatelyrepresentinvestors'useofinformationinvaluingequitysecurities d.Share-price-basedtestscanmeasurerelevanceandreliabilityasdefinedbyaccountingbodies. 16.Valuerelevancestudieshaveshownthat a.Reportedearningsaregoodmeasuresofvalue-relevantevents b.Anyrelationshipbetweenaccountingearningsandsharereturnsisweak. c.Lossesarestronglyassociatedwithafirmsabilitytogeneratefuturecashflows d.Noneoftheabove 17.Valuerelevanceresearchsuggestswhichmeasurementmodelbestlinkssharepriceandaccountinginformation? a.Accrualaccounting b.Fairvalueaccounting c.Historiccostaccounting d.Cashaccounting 18.Accountingstudiestestingmarketefficiencyhaveconclusivelyfoundthat a.Marketsarehighlyefficient b.Marketsaremoreefficientintheshortterm c.Marketsareefficientinthelongterm d.Thereisnotconclusiveevidenceaboutmarketefficiency 19.Whichofthefollowingisnotananomalythathasbeennotedtotheefficientmarketshypothesis a.Marketpricesappeartoreacttomorethanjustaccountinginformation b.Returnsoffirmsfollowedbyanalystsaresuperiortothosethatarenot c.Investorinterestvariesaccordingtothemarkettheshareistradedin d.Thereturnsofsmalllistedfirmsappeartobesmallerthanthoseoflargerfirms 20.WhichofthefollowingisNOTanassumptionbehaviouralfinance? a.Peoplemakesystematicerrorsintheirthinking b.Peopleanchoronlongtermexperienceandunderappreciaterecentexperience cbc.Peopleareoverconfident d.Peopleavoidrealisingpaperlossesbutseektorealisepapergains .
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Multiple Choice Questions 1.Fairvalueaccounting: a.Isanewconcept b.Iscurrentlyrareinaccountingstandards c.Appearsinmanyaccountingstandards d.Issimplyarefinementtothedefinitionofhistoriccost 2.AASB13FairValueAccountinghasaneffectivedateof: a.July2005 b.July2011 c.January2013 d.January2015 3.Traditionallywhatmeasurementtechniquehasbeenmostcommonlyused a.Modifiedhistoricalcost b.Fairvalue c.Replacementcost d.Salesvalue 4.Whichpartoftheassetdefinitionsupportstheuseoffairvalueaccounting? a.Control b.Relevanceandreliability c.Futureeconomicbenefit d.Pasttransaction 5.WhichofthefollowingisNOTpartoftheolddefinitionoffairvalue? a.Theamountanassetcouldbeexchangedfor b.Theamountaliabilitycouldbesettledfor c.Anarms-lengthtransaction d.Atmeasurementdate 6.WhichofthefollowinghasNOTbeenidentifiedasaproblemwiththeolddefinitionoffairvalue a.Thewordexchangeisunclear b.Thewordsettleispotentiallymisleading c.Thewordwillingisnotalwaysideal d.Noneoftheabove,i.e.theyareallcriticisms 7.WhichofthefollowingisNOToneofthereasonsgivenforissuingIFRS13? a.Toreplacetheuseofhistoricalcost b.Toenhancedisclosure c.Toclarifythedefinitionoffairvalue d.Toprovideasinglesourceofguidanceontheuseoffairvalue 8.IFRS13isconsidered a.Toclarifyourcurrentuseoffairvalue b.Tobearevolutionarystandard c.Tobeanevolutionarystandard d.Tobearegressionfrompreviouspractice 9.WhichofthefollowingisnotpartofthedefinitionoffairvalueunderAAASB13? a.Pricereceivedtosellanasset b.Pricepaidtosellaliability c.Knowledgeableandwillingparties d.Atmeasurementdate 10.Whydoesthenewdefinitionfocusonanexitpricewhenvaluingandassetorliability? a.Itfocusesonthecurrentvalue b.Itisspecifictotheitembeingconsidered c.Itintroducestheconceptofanexternalpartyintothetransaction d.Alloftheabove .
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Multiple Choice Questions 1.FinancialReportingCouncilareresponsiblefor: standardsetting. a.Broadoversightofthestandard-settingprocess b.ProvidingstrategicdirectionandadvicetotheAASB c.AppointingboardmemberstotheAASB d.alloftheabove 2.WhichofthefollowingisNOTafunctionoftheAASB? standardsetting. a.Makingaccountingstandards b.Promotinginternationalaccountingstandards c.Participateinthedevelopmentofinternationalaccountingstandards d.Enforcingcompliancewithaccountingstandards 3.WhichofthefollowingcantheAASBNOTdowhenadoptingIFRSs? a.Changeorremoverequirementsthatareseenasanti-competitive b.ChangewordstotakeintoaccountAustralianlegislation c.Requireadditionaldisclosure d.Limitthenumberofoptionaltreatments 4.Whichifthefollowingisanadvantageofrules-basedaccountingstandards? a.Reducedcomplexityofstandards b.Reducedopportunitiesforearningsmanagementthroughjudgements c.Cancovermostsituations d.Improverepresentationalfaithfulnessoffinancialstatements 5.Oneoftherules-basedstandarddisadvantagescanbe: a.Theycanbeverycomplex b.Theycanbeverysimple c.Theyallowfornomanipulation d.Noneoftheabove 6.Oneoftheadvantagesofprinciples-basedstandardis: a.Theyallowfornoprofessionaljudgement b.Theyaregenerallysimpler c.Theydonotimproverepresentationalfaithfulnessoffinancialstatements d.Noneoftheabove 7.Disadvantageofprinciples-basedstandardsis: a.Theyallowmangerstoselectpoliciesthatmaynotreflectthesubstanceofatransaction b.Theyallowaccountantstouseprofessionaljudgement c.Theysupplybroadguidelines d.Alloftheabove 8.WhichofthefollowingisNOTakeyelementofregulation? a.Anintentiontointervene b.Arestrictiononchoice c.Regulationshouldbebiased d.Theexerciseofcontrol 9.SignallingTheorypostulatesthat: a.Non-disclosingentitieswilldobetterinthemarketforfinance b.Regulationdecreasesthecostofcapital c.Regulationislargelyunnecessary d.Financialreportingisapointlessactivity 10.Whichofthefollowingisafundamentalassumptionofpublicinteresttheory? a.Peoplerationallyadvancetheirownself-interest b.Economicmarketsarefragile c.Regulationiscostly d.Thereisanefficientmarket .
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31.Whichofthefollowingisnotconsideredinvasionofprivacy? a.Blockingemployeeaccesstoexternalwebsites. b.Screeningemployeeemails. c.Maintainingalogthattracksemployeeusageoftheinternet. d.Noneoftheoptionsarecorrect. 32.Thereporting,byanemployeeormemberofanorganisation,oftheunethicalbehaviourofacolleagueiscalled: a.Informing b.Insiderreport c.Whistle-blowing d.Ethicalaction 33.Whetheritisethicalforthepurchasingmanagertoacceptagiftfromasuppliermaydependon: a.Thesocialculture. b.Thevalueofthegift. c.Thecompany’sgiftpolicy. d.Alloftheoptionsarecorrect. 34.Privacyis: a.Alegalissueonly. b.Anethicalissueonly. c.Bothalegalandanethicalissue. d.Neitheralegalnoranethicalissue. 35.IntermsofIT,cookiescannot: a.ensurethebrowserdoesnotdisplayadstheuserhasalreadyseen. b.ensuretheuserhasadequateprotectionagainstonlineunethicalbehaviours. c.trackthepreviousandnextsitestheuservisits. d.trackwhetherauserhasvisitedthesitebefore. 36.Consumerprofilingislesslikelytobeabletogatherinformationregarding: a.Consumerinterests b.Consumerpurchasingpatterns c.Consumerspendingcapability d.Consumerviewingpatterns 37.IntermsofIT,spamisaproblembecause: a.Itcanslowdownemailservers b.Itmayspreadcomputerviruses c.Itmayaffectthejobefficiencyofemployees d.Alloftheoptionsarecorrect. 38.Gainingunauthorisedaccesstoasystemiscalled: a.Hacking b.Identitytheft c.Phishing d.Noneoftheoptionsarecorrect. 39.Whichofthefollowingfraudcanoccurifanemployeeisresponsibleforbothapprovingandpayinginvoices? a.Payingnon-existentsuppliers b.Inventorytheft c.Creditfraud d.Alloftheoptionsarecorrect. 40.Whichofthefollowingisnottrue? a.Technologyisadvancingfasterthanthelegislationcankeeppacewith. b.Thethreemaintypesofcybercrimearefraud,hacking,andidentitytheft. c.Thecostofcybercrimeisnoteasytocalculate. d.Muchofthecybercrimegoesunreported. .
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41.Consider the following diagram. Which activity/activities can have slack? a.A,JandK b.C,DandE c.F,GandH d.BandI 42.Consider the following diagram. The critical path is: a.ACDEIJK b.ACDEFGHJK c.ABFGHJK d.ABIJK 43.There are two types of slack: a.favourableandunfavourable. b.inherentandallocated. c.dependentandindependent. d.precedingandfollowing. 44.Which of the following regarding project times is not true? a.Thelateststarttimeisthelatestpossibletimeatwhichataskcancommencewithoutdelayingtheproject. b.Thelateststarttimeisusedincalculatingtheamountofslackorsparetimeavailablefordisruptions. c.Activitiesonthecriticalpathcanhaveslacktimebuiltintothem. d.Thedifferencebetweentheearliestfinishtimeandthelatestfinishtimeistheamountofslackthatisavailable. 45.The earliest start time is calculated by: a.workingforwardsinthediagram. b.workingbackwardsinthediagram. c.calculatingthecriticalpathfirst. d.calculatingtheslackfortheentireprojectfirst. 46.If any activity that is on the critical path is delayed: a.thefinishingdayoftheprojectwillnotbeaffected. b.thefinishingdayoftheprojectwillbebroughtforward. c.thefinishingdayoftheprojectwillbedelayed. d.oneshouldnolongerfollowthecriticalpathforcalculatingprojectcompletiontime. 47.Consider the following diagram. The critical path takes.
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11.Whichofthefollowingisnotperformedbytheinternalauditfunction? a.Monitoringinternalcontrol. b.Examiningfinancialandoperationalinformation. c.Testtransactions. d.Implementbusinessprocessesthataremoreefficientandeffective. 12.Whichofthefollowingisperformedbytheinternalauditfunction? a.Evaluaterisks. b.Implementimprovedmanagementcontrolsystems. c.Implementimprovedriskcontrolsystems. d.Reviewingtheorganisation’sstrategicplans. 13.Theexternalauditors: a.mustnotusetheworkofaninternalauditor. b.canusetheworkofaninternalauditoratwhateverwayhe/shewants. c.canusetheworkofaninternalauditorsubjecttoguidelinesoutlinedinASA610. d.canusetheworkofaninternalauditorsubjecttoguidelinesoutlinedinIFRS. 14.GuidelinesinASA610relateto: a.thelevelofobjectivityassociatedwiththeinternalauditfunction. b.theleveloftechnicalcompetenceassociatedwiththeinternalauditfunction. c.whethertheactivitiesoftheinternalauditfunctionhasbeenproperlyplanned,reviewed,supervisedanddocumented. d.Alloftheoptionsarecorrect. 15.ASA700ForminganOpinionandReportingonaFinancialReportdoesnotoutlinetheauditor’sresponsibilitiesof: a.Theauditor’sreportshouldstatethattheauditwasconductedinaccordancewithinternationalaccountingstandards. b.Theauditshouldbedescribedincludingproceduresonhowevidencewasobtained. c.Theauditor’sreportshouldstatethattheauditwasconductedinaccordancewithAustralianaccountingstandards. d.Theauditor’sreportstatesthattheauditorbelievesthatsufficientandappropriateauditevidencewasobtainedtoformanopinion. 16.The purpose of an audit is to: a.Giveshareholdersaguaranteethatthefinancialstatementsarecorrect b.Givestakeholdersaguaranteethatthefinancialstatementsarecorrect c.Enhancethedegreeofconfidenceofintendedusersinthefinancialreport d.Noneoftheoptionsarecorrect 17.__________todeterminetheappropriatelevelofauditevidencerequiredtoformanopinionwhenAustralianauditingstandardsdirecttheauditorswork. a.Ahighlevelofprofessionaljudgementisnotrequired b.Ahighlevelofprofessionaljudgementisrequired c.Amoderatelevelofprofessionaljudgementispreferred d.Alowlevelofprofessionaljudgementisrequired 18.Afirmcanonlyprovidereasonableassurancethat: a.ThefirmanditspersonnelcomplywithAUASBStandards b.Thefirmanditspersonnelcomplywithrelevantethicalrequirements. c.Thefirmanditspersonnelcomplywithapplicablelegalandregulatoryrequirements. d.Alloftheoptionsarecorrect. 19.Auditqualitymaybecompromiseddueto:(i)timeconstraints(ii)managementpressure(iii)limitedresources. a.(i)(ii)(iii) b.(i)(ii) c.(ii)(iii) d.(i)(iii) 20.Non-compliancewithAccountingConceptsandStandardsis: a.sometimesrequired b.deemedappropriateonlyinextremecircumstances c.unprofessionalconduct d.Alloftheoptionsarecorrect. .
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11.Which of the following is NOT a requirement of the Sarbanes-Oxley Act: a.Noloansbycompanytodirectors b.Theuseofchecklists c.Auditpartnerrotationevery5years d.Thedisclosureofwhetherthereisacodeofethicsforseniorfinancialofficers 12.Anadvantageofaprinciples-basedapproachtocorporategovernanceisthat: a.Itplacesahigherlevelofdutyondirectorstodeterminewhichcorporategovernancepracticesarerequired b.Itrequiresacorporationtoprepareanannualreportandprovidethemtoshareholders c.Itbansloanstodirectors d.Alloftheoptionsarecorrect 13.Which of the following is NOT a significant influence on actual corporate governance practice? a.Thenatureoftherequirements b.Theenvironmentinwhichtheentityoperates c.Thecommitmentofmanagement d.Noneoftheabove,theyareallsignificant 14.WhichofthefollowingwereexamplesofriskmanagementdeficienciesthatleadtotheGFC: i.riskbeingmonitoredattheindividuallevelratherthantheentitylevel. ii.informationaboutrisksnotreachingtheboard. iii.theorganisationalcultureof‘pursuinggrowthinprofits’ iv.remunerationpackagesforhighriskactivities v.alertingshareholderstoapotentialinvestmentwithahighreturn a.i,ii,iii,v b.ii,iii,iv,v c.i,ii,iii,iv d.i,ii.,iii.,iv.,v. 15.What element of executive remuneration has been argued to have contributed to the global financial crisis? a.Shareoptions b.Bonusesonthebasisofshort-termprofits c.Bonusesonnon-financialkeyperformanceindicators d.Highfixedsalarycomponents 16.TheDodd-FrankWallStreetReformandConsumerProtectionactincludesprovisionsthatrequire: a.Executivecompensationtobesubmittedforshareholderapprovalviaanon-bindingvote b.Increaseddisclosureaboutthenatureofcompensationpackagesandpaymentsrelatedtofinancialperformance c.Thatcompensationcanberescindedifitwaspaidbasedoninaccuratefinancialstatements d.Alloftheabove 17.Whatisoneofthewaysthataccountingisusedtodirectandcontrolthemanagerofa corporation? a.Linkingofamangersperformancetoabonusthatdependsonaccountingprofit b.Makingdecisionsbasedontheaccountinginformationregardlessofmanagerialinput. c.Threateningtotellshareholdersamangersincomeifamanagermakesa‘poorfinancial’decision. d.Usingincomesmoothingtoassureamanagerthattheycaninvestinalowriskinvestment. 18.Inwhatwayscanaccountingcausefinancialreportingproblems? i.disclosurecanleadtoconstrainingofthebehaviourofamanager ii.accountinginformationmayleadamanagertomakingadifferentapproachtoacompany’soriginalfinancialapproach iii.thereisadriveordesiretomeetsharemarketexpectationsbasedontheseaccountingresults iv.themanipulationofearningstomeetmarketexpectations a.i,ii b.iii,iv c.i,ii,iii d.iv,iii,ii,i 19.When it comes to corporate governance many commentators have.
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Multiple Choice Questions 1.Themarketvalueofacompanyoften: a.Exceedsitsbookvaluebecausecertainassetsarenotrecognisedunderaccountingrules b.Appearstoberandomdistributedwithregardstobookvalue c.Islessthanitsbookvaluebecausecertainassetsarenotrecognisedunderaccountingrules d.Noneoftheabove 2.Historicallyinternallygeneratedintangibleassetshavenotbeenrecognisedinthefinancialstatementsforwhatreason? a.Thedifficultyinmeasuringtheassociatedcosts b.Failuretomeettheoldassetdefinition c.Theperceivedlackofusefulnessinassessingfutureearningscapacity. d.Theydidnotexistasaconceptuntilrecently 3.WhichofthefollowingisNOTpartoftheConceptualFrameworkdefinitionofanasset? a.Control b.Seperability c.Futureeconomicbenefit d.Noneoftheabove,i.e.theyareallpartofthedefinition 4.Whichofthefollowingattributesareimportantindeterminingwhetheranassetexists? a.Tangibility b.Ownership c.Existenceofamarketfortheasset d.Noneoftheabove 5.WhichofthefollowingisNOTacriticismthathasbeenlevelledatthecurrentdefinitionofanassetundertheConceptualFramework? a.Itistoocomplextooperationalise b.Itistoovaguetobeusedtosolveproblems c.Itexcludestoomanypotentialassets d.Noneoftheabove,i.e.theyhaveallbeenidentifiedasproblems 6.WhichofthefollowingisNOTafeatureofintangiblesthatdifferentiatesthemfromotherassets? a.Theyarelargelyknowledgebasedassets b.Manyarenotseparableitems c.Theyoftendonothavewell-definedpropertyrights d.Noneoftheabove,i.e.theyareallfeaturesofintangibleassets 7.WhichofthefollowinginNOTpartoftheAASB138definitionofanintangibleasset? a.Non-monetary b.Unidentifiable c.Controlled d.Noneoftheabove,i.e.theyareallpartofthedefinition 8.WhichofthefollowinginternallygeneratedintangibleassetscanberecognisedinaccordancewithAASB138? a.Mastheads b.Customerlists c.Registeredbrandnames d.Noneoftheabove 9.Differentialtreatmentofpurchasedversusinternallygeneratedintangibleassetsissaidtonotmakeeconomicsensebecause: a.Itviolatestheefficientmarkethypothesis b.Itisn’teconomicallyrational c.Itcreatesinformationasymmetry d.Alloftheabove 10.Internallygeneratedgoodwillisnotaccountedforbecauseitisdifficultto: a.Identify b.Measure c.Isolate d.Alloftheabove .
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1.TowhatdoesInternationalAccountingrefer? a.Descriptionsofaccountingpracticesindifferentcountries b.Comparisonofaccountingpracticesbetweencountries c.Accountingforinternationaltransactions d.Alloftheabove 2.WhichofthefollowingisNOTalevelthatcanbeusedtodefineinternationalaccounting? a.Supranational b.Company c.Comparative d.Noneoftheabove,i.e.theyarealllevelsofinternationalaccounting. 3.Withharmonisationofaccountingpracticesglobally a.Internationalaccountingdifferenceshaveallbutdisappeared b.Environmentalandculturalfactorsstillleadtodiversityinpractice c.Financialreportingisbecomingsimpler d.Alloftheabove 4.Whichofthefollowingislikelytoinfluenceaccountingsystemsatanationallevel? a.Taxsystem b.Politicalsystem c.Capitalmarketstructures d.Alloftheabove 5.Incountrieswherefinanceismainlyprovidedbybankswewouldexpect: a.Morelenientbankruptcylaws b.Greateremphasisonthebalancesheet c.Morepublicdisclosure d.Alloftheabove 6.Theaccountingregulationisheavilyinfluencedbythelegalsysteminwhichisoperates.InAustralialawsarebasedonwhichlegalsystem? a.CivilLaw b.CommonLaw c.CodifiedRomanLaw d.CaseLaw 7.TheworkofHofstedehasbeenveryimportanttothestudyofinternationalaccounting,whichofthefollowingwasNOToneofhisculturalcharacteristicsusedtodescribeculturesaroundtheworld? a.MasculinityversusFemininity b.Organisedversuslaid-back c.IndividualismversusCollectivism d.Noneoftheabove,i.e.theyareallculturalcharacteristics 8.GrayadaptedHofstede’scategoriesforaccounting,whichofthefollowingisnotoneofhisfouraccountingvalues? a.UniformityversusFlexibility b.SecrecyversusTransparency c.ConservatismversusOptimism d.Short-termversusLong-termOrientation 9.OneofGray’saccountingvaluesisProfessionalismversusStatutoryControl.WhichcountrywouldyouexpecttobeclosesttotheStatutoryControlendofthespectrum? a.Australia b.France c.UK d.USA 10.OnesignificantbarriertotheadoptionofinternationalaccountingstandardsinIslamiccountrieshasbeen: a.Theprohibitiononcharginginterest b.Refusaltocompartmentalisereligiousandsecularlife c.Therequirementtopayzakat(areligiouslevy) d.Alloftheabove .
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11.According to institutional theory which of the following statements is NOT true about corporate social and environmental disclosure a.Itwillbeheavilyinfluencedbyregulation b.Wellorganisedexternalstakeholderswillleadtoincreaseddisclosure c.Withinindustriesthenatureofthedisclosureislikelytodivergeovertime d.Noneoftheabove,i.e.theyarealltrue. 12.Legitimacy theory argues that disclosure practice. a.Organisationscanonlycontinuetoexistiftheydemonstratevaluesconsistentwithsocietyatlarge. b.Organisationsshouldfocusonwealthmaximisationfortheirowners c.Thebusinessofbusinessisbusiness d.Consumersareonlyinterestedinminimisingcoststothemselves. 13.Which of the following is NOT one of the four ways an organisation can obtain or maintain organisational legitimacy according to Lindblom? disclosure practice. a.Changeperceptionsofsociety,withoutchangingitsownbehaviour b.Manipulateperceptionsbydeflectingattentionfromsocietalconcerns c.Changeitsbehaviour d.Noneoftheabove,i.e.theyareallwaysanorganisationcanobtainormaintainlegitimacy 14.Stakeholder theory accounting disclosure practice. a.Iscompletelydifferenttolegitimacytheory b.Focusesongovernmentpower c.Hasbothanormativeandpositiveversion d.Alloftheabove 15.Which of the following.
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Multiple Choice Questions 1.How does the conceptual framework differ from an accounting standard? a.Theprinciplesintheconceptualframeworkarespecificinnaturewhileaccountingstandardsprovidemoregeneralrequirementsforfinancialreporting b.Theprinciplesintheconceptualframeworkaregeneralconceptswhileaccountingstandardsprovidespecificrequirementsforaparticularareaoffinancialreporting c.Theprinciplesintheconceptualframeworkaredesignedtoprovideguidanceandapplytoalimitedrangeofdecisionsrelatingtothepreparationoffinancialreportswhileaccountingstandardsapplytoawiderrangeofdecisionsrelatingtothepreparationoffinancialreports d.Theprinciplesintheconceptualframeworkprovidespecificrequirementsforaparticularareaoffinancialreportingwhileaccountingstandardsaredesignedtoprovidegeneralguidance 2.The accounting conceptual framework is what kind of theory? a.Abstract b.Normative c.Positive d.Emergent 3.The Conceptual Framework: a.IsbasedontheonePacioliincludedinParticularisdeComputisetScripturis b.IsusedbyeverycountrythathasadoptedtheInternationalAccountingStandards c.WasajointprojectbetweentheAASBandFASB d.Hasremainedunchangedforover20years 4.Which of the following questions does the Conceptual Framework NOT answer? a.Whoarefinancialreportsfor b.Whatisthepurposeofthefinancialreports c.Whattypeofinformationshouldbeincludedinfinancialreports d.Whatmeasurementbasisshouldbeusedinfinancialreports 5.Which of the following statements is correct in relation to the assumptions to be made when preparing financial.
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Multiple Choice Questions 1.Theories in accounting can help us to understand the decisions of: a.Financialinformationpreparers b.Financialinformationusers c.Financialinformationregulators d.Alloftheabove 2.Accounting theory helps us understand accounting better as: a.Afundamentalpartofthenaturaluniverse b.Ahumanendeavour c.Arandomprocess d.Arepresentationoftruth 3.A normative theory a.Iscompletelydivorcedfromreality b.Describes,explainsorpredictsactivities c.Isbasedonwhatshouldbethecasegivenacertainobjective d.Onlyfocusesonnormalactivities 4.A positive theory a.Iscompletelydivorcedfromreality b.Describes,explainsorpredictsactivities c.Isbasedonwhatshouldbethecasegivenacertainobjective d.Onlyfocusesonrewardingactivities 5.Which of these is NOT an assumption on which positive accounting theory is based? a.Peoplearerational b.Peoplearewealthmaximisers c.Peopleprefertoactaltruistically d.Noneoftheabove,i.e.theyareallassumptionsofpositiveaccountingtheory? 6.According to agency theory the following are examples of bonding costs: a.Auditingthefinancialreports b.Puttinginplaceoperatingrules c.Linkingremunerationtoperformance d.Alloftheabove 7.Which of.
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11.WhichofthefollowingisNOTconsideredachallengeforinternationalbusinessoperationswhenfacedwithaccountingdiversity? a.Itiscostlytorestatefinancialstatements b.Itreducesaccesstointernationalinvestments c.Nationalaccountingregimesareinferiortointernationalaccounting d.Noneoftheabove,i.e.theyareallachallenge 12.TheinternationalAccountingStandardsBoard’sobjectiveforInternationalAccountingStandardswouldbebestdescribedas a.Adoption b.Harmonisation c.Convergence d.Adaption 13.WhichofthefollowingisNOTanadvantagetoIFRSadoption? a.Itisacosteffectivewaytohaveacomprehensivesetofstandards b.Itmakesfinancialstatementsmorecomparable c.Itmakesaccountingstandarddevelopmentmoreflexible d.Noneoftheabove,i.e.theyarealladvantages 14.WhichofthefollowingelementsorstandardshasbeenraisedasasignificantproblemwiththeadoptionofIFRSincertaincountries? a.Consolidationrequirements b.Fairvalueaccounting c.Profitfocus d.Alloftheabove 15.InAustraliaIFRSsarerequiredtobeusedby: a.Allreportingentities b.Alllistedentities c.Consolidatedentitiesonly d.MultinationalEntities 16.China’sacceptanceofinternationalaccountingstandardswouldbebestdescribedas: a.Adoption b.Harmonisation c.Convergence d.Indifference 17.TheSECallowsnon-UScompanieslistedonaUSstockexchangetoreportusing: a.Theirhomecountry’sstandards b.InternationalAccountingStandards,withareconciliationtoUS-GAAP c.InternationalAccountingStandards d.Noneoftheabove,theymustuseUS-GAAPonly 18.Asof2012whichUS–IFRSconvergenceprojectsareapriority? a.Leases b.AccountingforIncomeTaxes c.Emissionstradingschemes d.Alloftheabove 19.Multinationalentities a.Arelargelyunaffectedbythecultureofindividualcountries b.Operateindependentlyofanynationallegalframework c.UseIFRSexclusively d.Noneoftheabove 20.Transferpricinghasbeenidentifiedasamajorproblemformulti-nationalentities.Thisrefersto: a.Settingupparententitiesintaxhavens b.Thepricingofgoodsandservicesexchangedwithinacorporategroup c.Payinglocalworkerslessthanexpatriateemployees d.Manufacturingcheaplyinthethirdworldtosellathighprofitinthefirstworld .
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41.Therearethreeriskfactorsknownasthe‘fraudtriangle’thataregenerallypresentwhenafraudiscommitted.Whichofthefollowingisnotoneofthem? a.Anincentiveorpressuretocommitfraud. b.Aperceivedopportunitytocommitfraud. c.Anabilitytorationalisethefraudulentaction. d.Anabilitytoavoidbeingdiscovered. 42.Abanktellerisexperiencingpressureathome,withmortgagepaymentsrapidlyapproachingandcreditcardsnearingtheirlimit.Thetellerhastheopportunityto‘borrow’someofthebank’scashtoplaceabetona‘surething’attheSaturdayraceswiththeintentionofreturningthecashtothebankonMondaymorning.Thisisanexampleof:(i)Pressureforfraud(ii)Opportunityforfraud. a.Only(i) b.Only(ii) c.Both(i)and(ii) d.Neither(i)nor(ii) 43.Anindividual’sperceivedabilitytocarryoutthefraudandconcealthefraudulentactivityisreferredtoas: a.Pressureforfraud. b.Opportunityforfraud. c.Rationalisationforfraud. d.Concealingforfraud. 44.Whichofthefollowingisnottrue? a.Researchstudieshavefoundthattheincidenceoffraudtendstoberelatedtotheethicalenvironmentoftheorganisation. b.Ethicalconductscanbepromotedthroughprofessionalregistration. c.Ethicalguidelinesexisttoguideauditorswhenmakingclientacceptancedecisions,whendeterminingthelevelofnon-auditservicefees,andonwhatgiftsfromtheclientcanbeaccepted. d.Codesofethicsshouldbeformal. 45.Peoplearemorelikelytoprovidepersonalinformationtosomeoneonthephonewhopurportstobeapoliceofficerorotherauthorityfigure.Thisisreferredtoasthe: a.Kindnessprinciple b.Authorityprinciple c.Socialcomplianceprinciple d.Distractionprinciple 46.WhichofthefollowingisnotoneofthesevenrecurringbehaviouralpatternsandrelatedprinciplesidentifiedbyStajanoandWilson? a.Needandgreedprinciple b.Timeprinciple c.Authorityprinciple d.Herdprinciple 47.Onceapersonrealisesthattheyhavebeeninvolvedinascam,thevictimmaybereluctanttotelltheauthorities.Thisisreferredtoas: a.Distractionprinciple b.Socialcomplianceprinciple c.Kindnessprinciple d.Dishonestyprinciple 48.Whichprincipleisthefoundationforphishingandsocialengineering? a.Dishonestyprinciple b.Herdprinciple c.Distractionprinciple d.Socialcomplianceprinciple 49.Whichofthefollowingistrue? a.TheCOSOframework,ratherthantheCOBITframework,canbeutilisedtoreducetheriskofcyberfraud. b.TheCOBITframework,ratherthantheCOSOframework,canbeutilisedtoreducetheriskofcyberfraud. c.TheCOSOandCOBITframeworkscanbothbeutilisedtoreducetheriskofcyberfraud. d.TheCOSOandCOBITframeworksareirrelevanttocyberfraud. 50.Intermsofcybercrime,whichofthefollowingistrue? a.Employeesareonlythemainriskinsidetheorganisation. b.Employeesareonlythemainriskoutsidetheorganisation. c.Theremustbeclearandswiftsanctionsagainstsecuritymisconduct. d.Externalauditismoreeffectiveindetectingfraudthaninternalaudit. .
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31.Whichofthefollowingisnottrue? a.AustralianAuditingStandards(ASAs)arelegallybindingauditingstandards. b.AustralianAuditingStandards(ASAs)areissuedbytheAustralianAuditingandAssuranceStandardsBoard. c.AustralianAuditingStandards(ASAs)setoutauditrequirementsforlistedcompaniesundertheCorporationsAct d.AustralianAuditingStandards(ASAs)arelegallyenforceablelegislativeinstruments. 32.Sarbanes-OxleyAct(SOX)haslegalforceonwhichofthefollowing? a.UScompanies b.CompaniesthatareduallistedonaUSstockexchange c.SubsidiariesofUScompanies d.Alltheabove 33.Theexaminationoffinancialreportstoformaviewindependentlyfromtheorganisationastothereliabilityoftheinformationprovidedinthereportsisreferredtoas: a.Afinancialaudit. b.Aninternalaudit. c.Anexternalaudit. d.Aninformationaudit. 34.Theprocessoftheauditorforminganopinionandreportingonwhetherornottheaccountshavebeenpreparedinaccordancewithgenerallyacceptedaccountingprinciplesistechnicallytermedas: a.Externalaudit b.Internalaudit c.Financialaudit d.Attestservice 35.Theauditorperformingan attestserviceis: a.Anexternalauditor b.Aninternalauditor c.Eitheranexternalauditororaninternalauditor d.AnAISauditor 36.Whichofthefollowingstatementsregardingauditorsistrue? a.Whentheauditorsaretoformanopinionthatthefinalaccountstrulyandfairlysummarisetheunderlyingtransactions,theydonotnecessarilyhavetohaveconfidenceintheintegrityoftheAIS. b.IftheauditorsaretoformanopinionthatthefinalaccountstrulyandfairlysummarisetheunderlyingtransactionsthentheymusthaveconfidenceintheintegrityoftheAIS. c.IftheauditorsaretoexpressconfidenceintheintegrityoftheAIS,thentheymustformanopinionthatthefinalaccountstrulyandfairlysummarisetheunderlyingtransactions. d.TheintegrityoftheAISandtheauditors’opiniontowardsthefinalaccountsareirrelevant. 37.Most AIS today are computer based. Auditingtheinformationsystem requires the auditors to: a.Treatthecomputerasablackboxandworkaroundit b.RecognisethespecialthreatsinherentinITandincludetheseintheauditplan c.Justlookatthemanualsystemsandprocedures d.Employethicalhackerstoauditthecomputersystem 38.Anaccountinginformationsystemsmayface: a.Inherentrisk b.Controlrisk c.Detectionrisk d.Alloftheoptionsarecorrect. 39.Theriskofmaterialmisstatement,withoutregard to the effects of controls, is: a.Aninherentrisk b.Acontrolrisk c.Adetectionrisk d.Anincontrollablerisk 40.Theriskofmaterialmisstatementresultingfromtheinternalcontrolsinplacefailingtodetectafraudulentorerroneoustransactionis: a.Aninherentrisk b.Acontrolrisk c.Adetectionrisk d.Anincontrollablerisk .
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11.Information produced using historical cost as the measurement base is considered a.Lessrelevant b.Lessfaithfullyrepresented c.Morecomparable d.Alloftheabove 12.Information produced using fair value as the measurement base is considered a.Morerelevant b.Morefaithfullyrepresented c.LessNeutral d.Alloftheabove 13.Information produced using current cost as the measurement base is considered a.Lessrelevant b.Lessunderstandable c.Morecomparablebetweendifferentcompanies d.Alloftheabove 14.Information produced using deprival value as the measurement base is considered a.Lessrelevant b.Lessfaithfullyrepresented c.Lessunderstandable d.Alloftheabove 15.An argument against fair value measurement in accounting is: a.Marketpricesaretooobjective b.Itdoesnotallowenoughprofessionaljudgement c.Itcanleadtovolatilityinearnings d.Itreflectsthevalueoftheitemtoday 16.Which measurement.
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11.Bigbathaccountingisgenerallyusedtodropearningswhen a.Thereisachangeinmanagementteam b.Whenoperationsarerestructured c.Whentheeconomyispoor d.Alloftheabove 12.WhichofthefollowingearningmanagementreasonswouldNOTbeviewedasapositiveforshareholders? a.Toaccuratelyconveyprivateinformation b.Toincreaseshorttermprofits c.Tomeetanalysts'expectations d.Toavoidviolatingdebtcovenants 13.Whydoesincomesmoothinggenerallyleadtoahighersharevalue? a.Itreducestheperceivedriskofthecompany b.Itleadstohigherperceivedincome c.Itisperceivedasincreasingthechanceofinsolvency d.Noneoftheabove 14.WhichofthefollowingisNOTthoughttoreflectearningsquality? a.Trendinprofitresults b.Totalincometaxexpensefortheperiod c.Operating/non-operatingmix d.Earningsbase 15.Researchintoincomesmoothinghasconcludedthat a.Smoothedincomeindicateshighearningsquality b.Smoothedincomeindicateslowearningsquality c.Thefindingsaremixedwithregardstoearningsquality d.Thereisnorelationshipbetweenincomesmoothingandearningsquality 16.Whichofthefollowingcomponentsofmanagerialcompensationarethoughttomostencourageearningsmanagement a.Theirbasesalary b.Theircashbonuses c.Sharesorshareoptions d.Variousperquisites 17.Whichofthefollowingismostlikelytobetrue a.AnexistingCEOfacingremovalislikelytomanageearningsdownwards b.AnincomingCEOfollowingaforceddeparturewillfinditeasiertomanageearningsupwards c.AnincomingCEOwouldprefertomanageearningsdownwardintheirfirstyear d.Noneoftheabove 18.Researchersexaminingsharepricereactionstoevidenceoffraudulentreportinghaveconcludedthat: a.Marketsarehighlyefficient b.Marketsinterpretthediscoveryasgoodnews c.Marketsaregenerallysurprisedbytheinformation d.Sharepricesaregenerallyunaffected 19.ResearchintoIPOsandearningsmanagementhaveindicated: a.Investorsexpectupwardsearningmanagement b.Firmsdonotengageinupwardsearningsmanagement c.Themarketdoesdiscoverupwardsearningmanagement d.Noneoftheabove 20.Whichofthefollowingboardcharacteristicsarelikelytoreduceearningsmanagement a.Amixofmonitoringandexpertiseskills b.Moreindependentdirectors c.Theexistenceofanauditcommittee d.Alloftheabove .
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11.WhichofthefollowinghasASICidentifiedasapracticethatindicatesriskofcorporateinsolvency? a.Disorganisedinternalaccountingprocedures b.Judgementdebts c.Lossofkeymanagementpersonnel d.Alloftheabove 12.WhichofthefollowinghasASICNOTidentifiedasapracticethatindicatesriskofcorporateinsolvency? a.Absenceofcorporateplans b.Enteringintoinstalmentarrangementstopaydebts c.Decreasedmonitoringbyfinancier d.Noneoftheabove,i.e.theyhaveallbeenidentifiedbyASIC 13.Corporategovernancehasbeensuggestedtobeattheheartofcorporatefailure.Ithasbeensuggestedthatcompaniesarelesslikelytogetinfinancialtroubleiftheirboards: a.Letmanagementrunthecompanywithminimaloversight b.Areactiveintheirroles c.Alsomanagethecompany d.Havegoodpoliticalconnections 14.BusinessWeekconsiderswhichofthefollowingtobegoodgovernancewhenratingboards? a.Directorsshoulddobusinesswiththecompany b.Directorsshouldownsharesinthecompany c.Directorsshouldalwaysmeetwithmanagementpresent d.Noneoftheabove 15.ThecorporatecollapseinAustraliathathappenedinthe1980’swerethoughttobearesultof: a.Poorcorporategovernance b.Inadequateaccountingdisclosures c.Economicdownturn d.Auditfailures 16.Followinganumberofcorporatefailuresin2001legislativechangesinAustralia: a.Prohibitedauditfirmsfromprovidingotherservicestoclients b.Requiredtherotationofauditfirmsevery5years c.Requireddisclosureofthenatureandvalueofnon-auditservicesprovidedbyauditorstobedisclosed d.ForcedtheAustraliangovernmenttoenacttheSarbanes-OxleyAct 17.AcommonfactoridentifiedasanissueinboththeHIHandEnroncollapseswas: a.Deficienciesintheauditprocess b.Overrelianceoncomplexfinancialinstruments c.Lackofboardindependence d.Noneoftheabove 18.IthasbeennotedthatremunerationpackagesforCEOsinfailedcompanies: a.Tendtoincludemoreoptions b.Haveasubstantiallylowerproportionof‘atrisk’components c.Aregenerallymuchhigher d.Aregenerallymuchlower 19.Abubbleinwhichclassofassetshasgenerallybeenclaimedasthetriggerfortheglobalfinancialcrisis? a.Shares b.Preciousmetals c.Consumables d.Housing 20.WhichofthefollowingmechanismstransferredthefinancialcrisisfromtheUStotherestoftheworld? a.Exposureoftheworld’sfinancialsystemtosub-primedebt b.DeclineinUSdemandforimports c.Contagionofconcernsaboutthehousingmarketinothercountries d.Alloftheabove .
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21.Why is the system development lifecycle (SDLC) called a ‘lifecycle’? a.Oncemaintenancecannolongerkeepthesystemeffectivetheprocessrestartsfromthebeginningofinvestigation. b.Theresultingsystemwilllastforthewholelifeofthecompany. c.Thenewsystemevolvesandgrowslikealivingorganism. d.Ifchangesarerequired,itiseasytocycleroundthestagesagain. 22.A document that outlines the specifications for the new system and is sent to potential vendors can be a: a.requestfortender. b.requestforproposal. c.requestforquotations. d.alloftheoptionsarecorrect. 23.Which of the following statements regarding in-house-developed programs is true? a.In-house-developedprogramsareoftenbetterthancommercialoff-the-shelfprograms. b.In-house-developedprogramsareoftencheaperthancommercialoff-the-shelfprograms. c.In-house-developedprogramsoftenhavelessstrategicalignmentissuesthancommercialoff-the-shelfprograms. d.In-house-developedprogramsareoftenchosenovercommercialoff-the-shelfprograms. 24.Which is the highest level of system testing? a.Stublevel b.Systemlevel c.Unitlevel d.Firmlevel 25.From least risky to most risky, which.
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11.Howispurchasedgoodwillvalued? a.Atfairvalue b.Asthebalancingitembetweenthefairvalueofassetsandtheircarryingamount c.Asthebalancingitembetweenpurchaseconsiderationandthefairvalueofidentifiablenetassetsacquired d.Athistoriccost 12.Ithasbeenarguedthatwhenitcomestointangibleassetscapitalmarketswouldbebetterservedby: a.Requiringallintangibles,internallygeneratedorpurchased,tobeexpensed b.Onlyallowingpurchasedintangiblestobecapitalised c.Givingdiscretiontomanagementonwhentocapitaliseintangibleassets d.Requiringallintangibles,internallygeneratedorpurchased,tobecapitalised 13.Levhassuggestedthatbynotincludinginternallygeneratedintangibleassetscompanies’bookvaluesmaybeunderstatedbyasmuchas: a.100% b.75% c.50% d.25% 14.WhichofthefollowingisNOTpartofthedefinitionofaheritageasset? a.Intangible b.Ofhistoric,artistic,scientificetc.value c.Heldandmaintainedforitscontributiontoknowledgeandculture d.Noneoftheabove,i.e.theyareallpartofthedefinition 15.WhichofthefollowingisNOTanexampleofaheritageasset? a.Stonehenge b.Aboriginaloralhistory c.TheGreatBarrierReef d.Noneoftheabove,i.e.theyareallheritageassets 16.WhichpartoftheConceptualFrameworkdefinitionofanassetmakesrecognitionofHeritageAssetsdifficult? a.Futureeconomicbenefit b.Control c.Pasttransactionorevent d.Bothfutureeconomicbenefitandcontrol 17.WhichpartoftheConceptualFrameworkdefinitionofaliabilitymakesitunlikelythatHeritageAssetsshouldberecognisedasliabilities? a.Futureeconomicsacrifice b.Presentobligation c.Pasttransactionorevent d.Measurability 18.WhichoffollowingmethodshaveNOTbeenproposedtomeasurethevalueofHeritageAssets? a.Valuationatnominalamounts b.Travelcostmethod c.Contingentvaluation d.Noneoftheabove,i.e.theyareallproposedmeasurementapproaches 19.OneimportantquestionregardingtherecognitionofHeritageAssetsiswhethertheyfallwithinSAC2.Whichofthefollowingquestionswouldaddressthisconcern? a.Aretheentitiesholdingtheassetsreportingentities? b.Dotheassetsmeettheformaldefinitionofanasset? c.Arethereidentifiableuserswhorequirefinancialinformationabouttheassets? d.Canthevalueoftheassetsbeaccuratelymeasured? 20.WhichobjectiveoffinancialaccountingmostcloselyalignswiththeconceptofHeritageAssets? a.Stewardship b.Corporategovernance c.Decisionusefulness d.Financialvaluation .
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21.Ideally,awebsiteshouldnotstoreanydataofthepotentialcustomerduringthecustomerregistrationprocessuntil: a.ThecustomerhasagreedtorelevantTermsandConditions. b.Thecustomerhaselectedtopressthe‘Submit’buttonontheelectronicregistrationform. c.Thecustomerhasreviewedallinformationenteredinpreviousstepsofregistration. d.Alloftheoptionsarecorrect. 22.Whensubmittingtheironlineregistrationform,apop-updialogueboxappearsinthecustomers’Internetbrowseraskingthemtoconfirmthesubmissionofinformation.Thisisanexampleof: a.Informedconsent b.Impliedconsent c.Forcedconsent d.Consciousconsent 23.InformationprivacyprinciplesfromthePrivacyAct1988donotdictatethat: a.Informationshallnotbedisclosedtoathirdpartyunlesssuchdisclosurewasmadeknowntothesubjectatthetimetheinformationwassolicitedandthesubjectconsentedtosuchdisclosure. b.Individualshavetherighttoviewtheinformationthatiskeptaboutthem. c.Individualshavetherighttorequirethatanyinaccuracyregardinginformationthatiskeptaboutthembecorrected. d.Thepersongatheringinformationshouldusewhatevermeanstoensurethattheinformationiscompleteanduptodate. 24.TheprinciplesofthePrivacyAct1988donotexplicitlycover: a.Collectionofinformation. b.Storageofinformation c.Usageofinformation d.Disposalofinformation 25.Whichofthefollowingfactorsdoesnotaffecttheusageofinternettechnology? a.Age b.Education c.Geography d.Gender 26.Whichofthefollowingstatementsregardinginternetaccessistrue? a.Youngpeoplearemorelikelytohaveinternetaccess. b.Wealthierpeoplearemorelikelytohaveinternetaccess c.Welleducatedpeoplearemorelikelytohaveinternetaccess d.Alloftheoptionsarecorrect. 27.WhichofthefollowingfactorsisthemostimportantoneinaddressinginternetaccessissuesinAustralia? a.Socialbarriers b.Economicbarriers c.Technicalbarriers d.Alloftheoptionsarecorrect. 28.Whichoftheprivacyprinciplescoverstherequirementthatinformationshouldbeprotectedfromlossandunauthorisedaccess? a.Collectionofinformation b.Recordkeeping c.Storage d.Access 29.Whichofthefollowingcontrolscanensurethatallsoftwareisproperlylicensedinanorganisation? a.Usersarerestrictedfrominstallingprogramsorrunningunauthorisedprogramsontheirworkcomputer. b.Administratorrightsandpoweruserrightsarenotassignedtoanycommonuser. c.Centraliseddeploymentofsoftware. d.Alloftheoptionsarecorrect. 30.Someorganisationsrestrictemployee’saccesstoexternalwebsitessuchasFacebookandeBaythatarenotrelevanttowork.Suchconductis________fromanemployee’sperspective: a.Definitelyunethicalandillegal b.Definitelyunethicalbutlegal c.Potentiallyunethicalandillegal d.Potentiallyunethicalbutlegal .
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11.Kantianism suggests that: a.Anactionismorallyrightifitismotivatedbyagoodwillthatstemsfromasenseofduty b.Maximisationofanindividual’sutilityshouldnotbeattheexpenseofthegrouporcommunity c.Therearealwaysmultipleethicalapproaches d.Noneoftheoptionsarecorrect 12.WhichofthefollowingisnotatypeofConsequentialisttheory? a.Ethicalutilitarianism b.EthicalKantianism c.Ethicalegoism d.Ethicalaltruism 13.Cost–benefitanalysisisanexampleof: a.Opportunism b.Hedonism c.Realism d.Utilitarianism 14.Whichofthefollowingisnotacriticismofutilitarianism? a.Therightsofindividualsarenottakenintoaccount. b.Itdoesnotconsidertheminorityquestion. c.Someindividualsmaysuffergreatharmwhileothersmayreceiveonlymodestbenefits. d.Happinessistheultimategoalofhumanbehaviour. 15.Awhistleblower is: a.Anothertermforadisgruntledemployee b.Someonewhohighlightsfavourablecompanyinformation c.Someonewhoexposescorruptionormalpractice d.Noneoftheoptionsarecorrect 16.Thesayingthatanactionismorallyrightifitismotivatedbyagoodwillthatstemsfromasenseofdutyisknownas: a.Kantianism b.Hedonism c.Realism d.Utilitarianism 17.WhichofthefollowingstatementsregardingKantianismisnottrue? a.Kantianismisembeddedindutyorobligationandencompassesadignityorrespectfortheindividual. b.AccordingtoKantianism,abusinessthatisdoingrespectfulthings,despitethatitismotivatedbyprofits,isactinginaprudentandmoralway. c.CriticspointoutthatKantianism’suniversalobligationsdonottakeintoaccountparticularsituations. d.Kantianismisgroundedinthenotionofrespectfortheindividual. 18.Whichofthefollowingstatementsregardingethicsanddecisionmakingistrue? a.Anethicalframeworkispreferablebutnotessentialinmakinggooddecisions. b.Ethicaltheoriesarepreferablebutnotessentialinmakinggooddecisions. c.Inmostcasesdecisionsbasedonintuitionandpersonalfeelingswillachievebetteroutcomesthanthosebasedonanethicalframework. d.Ethicsisverycomplex. 19.DoelectronicAccountingInformationSystemsposemoreofathreattocustomerprivacythanpaperbasedsystems? a.Nobecausethedatacannotbereadbyahuman. b.Yesbecauseorganisationsalwayssellthedataontomarketingcompanies. c.Nobecausetherearelawsthatprotecttheprivacyofcustomers. d.Yesbecauseorganisationscancollectmoredataaboutmorepeoplethaneverbefore. 20.________referstotheindividualconsentingtotheinformationgatheringthroughtheirsubsequentactions. a.Informedconsent b.Impliedconsent c.Forcedconsent d.Noneoftheoptionsarecorrect. .
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Short Answer Questions 1. Briefly explain the five stages of systems development lifecycle. 2. What is technology-organisational fit? Why is it important during systems development? 3. Briefly describe different types of feasibility analysis that need to be carried out before systems development. .
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11.Whichtwoeconomicconceptsarefundamentaltotherelevanceoffairvaluestoaccounting? i.TheEfficientMarketsHypothesis ii.SupplyandDemand iii.EconomicRationalism iv.MarginalUtility a.i.&ii. b.ii.&iv. c.i.&iii. d.iii.&iv. 12.WhichofthefollowingwouldNOTindicatethatmarketisinactive? a.Littleinformationispubliclyavailable b.Pricequotationsdon'treflectcurrentinformation c.Thebid-askspreadisnarrow d.Indicesaredemonstrablyuncorrelatedwithrecentindicationsoffairvaluation 13.Whenfairvaluingamotorvehiclewhichofthefollowingisleastlikelytobeimportant? a.Age b.Makeandmodel c.Colour d.Kilometrestravelled 14.Whenvaluingnon-financialassetswhichusefortheassetshouldbeconsidered a.Theasset'shighestandbestuse b.Theasset'scurrentuse c.Theasset'sexpecteduse d.Noneoftheabove 15.WhenfairvaluingaliabilitywhichfactorshouldNOTbeconsidered? a.Non-performancerisk b.Thefairvalueofthecorrespondingasset c.Expectationsofthemarketaboutfulfillingtheobligation d.Noneoftheabove,i.e.theyareallfactorstoconsider 16.Whichofthefollowingisnotanacceptablevaluationtechnique a.Theincomeapproach b.Thecostapproach c.Theexpertevaluationapproach d.Noneoftheabove,i.e.theyareallacceptablevaluationtechniques 17.Whichofthefollowingwouldmostlikelybevaluedusingalevel2valuation? a.Gold b.Abuilding c.Shares d.Abusinessunit 18.Whichofthefollowinginformationmustbeprovidedinthefinancialreportaboutlevel3fairvaluations a.Adescriptionofthevaluationtechniqueused b.Iftheassetisnotbeingusedforitshighestandbestusewhythisisthecase c.Quantitativeinformationontheinputsusedinthemodel d.Alloftheabove 19.WhichofthefollowingisNOTatransactioncostthatshouldbeconsideredinthecalculationoffairvalue? a.Transportcosts b.Agent'ssellingfees c.Costsassociatedwithmarketingtheitem d.Noneoftheabove,i.e.theyarealltransactioncosts 20.Wherethereisadifferencebetweenfairvalueatinitialrecognitionandcost,assumingnootherstandardprohibitsit,theentityshould a.Ignorethedifferenceasthereshouldbenodayonegainorloss b.Amortisethedifferenceovertheusefullifeoftheitem c.Immediatelyadjustthevalueandrecogniseprofitorloss d.Paymoreorlessfortheitemtomakethefiguresequal .
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Multiple Choice Questions 1.Earningsareimportantbecause: a.Increasedearningssignalanincreaseinequityvalue b.Earningsareusedtoassessmanagementperformance c.Earningsassistinpredictingfuturecashflows d.Alloftheabove 2.WhichofthefollowingisNOTlikelytobeinterestedinearningsinformation a.Shareholders b.Lenders c.Customers d.Noneoftheabove,i.e.theyareallinterestedinearningsinformation 3.Earningsmanagement a.Isillegal b.Isconsideredtoalwaysbeharmfultoshareholders c.Hasarangeofmeanings d.Noneoftheabove 4.Withregardstoinventorywhichofthefollowingwouldbeclassedasconservativeaccounting? a.Beingslowtowritedownslow-movinginventory b.Stillrecordingobsoleteinventoryasanasset c.Consistentlyandquicklyapplyingthelowerofcostandnetrealisablevaluerule d.Overstatinginventorybyincludingnon-existentinventoryinaccounts. 5.Whichofthefollowingwouldbeconsideredfraudulentaccounting? a.Recognisingrevenuewhenservicesareprepaidbutonlypartiallyperformed b.Capitalisingadvertisingcosts c.Liberalcredittermsandestimationofprovisionfordoubtfuldebts d.Restatingusefullifeandresidualvalueofnon-currentassetsupwards 6.WhichofthefollowingmethodsisNOTcommonlyusedtomanipulateearnings: a.Accountingpolicychoice b.Acceleratingexpenses c.Incorrectclassificationofcurrentliabilitiesasnon-current d.Aggressiveaccountingforaccruals 7.Anentitycanchangeitsaccountingpolicy: a.Provideditcanarguethatthenewmethodprovidesbetterinformationforusers b.Onlywiththeapprovalofitsauditors c.Neveroncethedecisionismade d.Asoftenasitlikes 8.WhichofthefollowingisNOTanaccrualaccountingtechniquethatcouldbeusedtomanageearnings? a.Under-provisioningforbaddebts b.Delayingassetimpairments c.Adjustingclosinginventoryvaluations d.Noneoftheabove,theycouldallbeusedtomanageearnings 9.WhichofthefollowingtechniquesisNOTgenerallyusefultosmoothincome a.Varyingtheprovisionforwarranties b.Hedgingoffinancialinstruments c.Usingfairvalueaccounting d.Noneoftheabove,theycouldallbeusedtosmoothincome 10.WhichofthefollowingisNOTanexampleofrealactivitiesmanagementthatcouldbeusedtomanageearnings? a.Reducingdiscretionaryspending b.Adjustingloanlossprovisions c.Acceleratingsales d.Delayingresearchanddevelopment .
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11.Intangible assets are defined as a.One-sidedfinancialassets b.Unidentifiableassetswithoutphysical c.Identifiablenon-monetaryassetswithoutphysicalsubstance d.Alloftheabove 12.Which of the following is specifically prohibited from recognition as an intangible asset according to AASB138? a.Internallygeneratedbrands b.Research c.Training d.Alloftheabove 13.Which of the following intellectual capital could be included in the Statement of Financial Position? a.Trainingofprogrammersemployedbyacompany b.Developmentofsoftwarebythecompanyforinternaluse c.Developmentofsoftwarebythecompanyforexternaluse d.Noneoftheabove 14.The annual report a.Mayhavesignificantadditionalvoluntarydisclosureinthefinancialstatements b.Isusedforimpressionmanagement c.Isthoughttohavelittleinfluenceonstakeholderperceptions d.Isnotthoughttobeanimportantinformationavenuefororganisations 15.The kinds of information likely to be included in the annual report includes a.Corporategovernance b.Environmentalperformance c.Occupationalhealthandsafetydisclosures d.Alloftheabove 16.Annual reports contain.
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