Miscellaneous Quiz / Accounting FHS

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Can you name the Accounting FHS?

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Periodic report on short, medium and long run value creation
Under FASB, revenue cannot be recognised until a __ __ has occurred in the earnings process
(2009) Confirms that new lease accounting standards will have significant impact on financial ratios such as leverage. Managers will have to re-evaluate debt agreements, etc.
(2003) Instead of budgets, managers should use peers and competitors as performance benchmarks (effort won't be based on arbitrary targets)
The ideal framework should make ___ ___ the focal point and most important measurement
Development costs _ under IFRS and _ under GAAP
(2009) ABC has been dropped by many firms because of its complications
(1993) Braintree hospital used ABC to cope with changing health insurance industry.
(2010) Negative goodwill is not valued by investors
(2009) Zero based budgets force managers to scrutinise costs rather than accept an arbitrary year on year increase
(2001) Budget gaming can be remedied by removing compensation based on target meeting
(1995) ABC reveals insights about the profitability of products, product lines and customers
(2010) Accepting convergence would show that the US is politically cooperative
(1968) Found that 85-90% of the information content of financial statements has already been released by more timely media forms. Hence the need for value relevance is diminished.
(2015) Zero based budgets help managers focus on HOW to cut costs rather than just which ones.
44% of US companies use Balanced Scorecard
(2010) Ideal conceptual framework should: focus recognition and measurement on transactions, separate operating and financing activities, focus on operating income, conservatism
(2008) We should focus more on IS than BS (as investors)
(2009) The adoption of IFRS changes the magnitude of key accounting ratios
__ __ didn't make sense for the iPhone
BSC provides no __ __
The solution to convergence may be to aim for __ instead of standardisation
ABC only useful if activities are _ and _
(2005) Predicts that IFRS implementation in Eurozone countries will be telling because of the variance in institutions etc. Expects demand for implementation guidance
Organisation that issues guidelines on sustainability reporting. Criticised for promoting lots of reporting rather than efficient reporting
(2006) If fair value is to be used then there must be at least some level of criteria/rules to give auditors something to work with (in terms of criticism of accounts)
Environmental costs incurred to measure and detect external costs
(2006) Convergence would make the dominant standards a monopoly and inhibit innovation.
Performance against KPIs on Balanced Scorecard uses both _ and _ measures
The ideal framework should encourage and harbour __
(2003) Budgets should be abandoned as they sustain a comman-control culture, are inflexile and encourage gaming for self-interest
(2011) The impairment test is problematic because its implementation is not uniform across companies. E.g. larger firms have more experience and do it differently.
__ Agreement (2002) put the IASB and FASB to the task of reducing differences between the two
(2006) Convergence will improve comparability, market efficiency and could lower barriers to international acquisitins
(2010) Notes how there are incorrect definitions of assets and revenues in the IASB framework and that no definition is given for profit
(2010) Firms operating decisions are affected by ratio considerations
(2010) US decision on convergence depends on trade off between one off transition costs and persistent comparability gains.
Environmental costs incurred when there is an indirect cost of actions on firm resources (such as employee health)
(2010) Survey of managers saw budgets as control tool AND value adding
(2003) Describes the history of accounting as a profession including the replacement of the auditing mentality with a consulting mentality
4 Perspectives of Balanced Scorecard: F_, C_, I_,L_(&Growth)
OCI is not a good predictor of future economic performance
(2011) Praise the intentions of the exposure draft on leases but criticise it for allowing a variety of fair value methods which could undermine comparability
Choosing to capitalise rather than expense leads to higher reported _ _
The ideal framework should separate __ from ___ activities
Costs that occur indirectly through firm actions such as pollution
(2007) ABC is only a refinement of traditional costing, has technical limitations and costly implementation and operation
Environmental costs incurred to reduce future environmental costs of operations
__-___ Act (2002) was introduced following the Enron scandal. It is designed so that future scandals trigger a political process that results in correcting standards being created
(2001) Accounting serves an important use for regulatory, stewardship, taxation purposes etc.
(2001) The most fundamental accounting principle is conservatism but this does not have to be mutually exclusive with value relevance.
(2007) ABC helps managers focus on the activities that are significant
(2006) The process and success of implementation of IFRS will vary by country and local differences will be hidden behind a veil of uniformity
Environmental costs incurred when there is an indirect cost of actions on society's resources
(2006) Associate the rules-base of GAAP with the Enron scandal
(2012) Studied lease accounting practice and found 'no support' for conventional wisdom that principles encourage adherence to spirit of standards
Sustainability: __ use of, __ use of or __ use of resources in performing operating activities
(2008) Intangibles generate income indirectly through other tangible assets
(2013) Predicts the success of IFRS implementation in a certain country depends on 'cultural distance' and whether there is a member of the board from that country.
(2014) Fair values are unverifiable. Therefore, the disincentives to manipulate the books are diminished. Leads to unreliability.
(2011) There is a perpetual challenge in balancing relevance and reliability
Old lease standard: Under _ more than _% economic life must be on BS whereas under _ 'major part' of economic life
(2012) Goodwill write offs are a tacit admission of a managerial cock up
(2004) Time driven ABC could alleviate the limitations. Managers directly estimate appropriate allocations.
Lars Sorensen, CEO of _ _: Sustainability determines profits in the long run
(2007) ABC showed 1 company that only 400 of 1400 customers were profitable (problem lay with small orders)
(2003) Argues that measures such as the SO Act are useless if there is no fundamental faith in the auditing profession to do its job properly.
Revaluation of goodwill impairment allowed under __ not under __
The ideal framework should focus __ and __ on __
Has no responsibility to any specific country.
(2010) Found a positive relationship between earnings and the positive intangible, employee satisfaction. This shows that not all tangibles have been priced in.
_ lease if it transfers substantially all the risks and rewards of ownership of the __ to the lessee
(1988) Developed ABC
BSC has an overemphasis on _ measures
(2001) The most important users of financial statements are investors. Therefore, value relevance is very important
Kaplan and Norton's (1992) sustainable management reporting tool
(2010) After IFRS implementation: stock prices of firms with poor standards beforehand rose - stock prices down for firms in code law countries
New lease standard from FASB: both _ and _ must appear on balance sheet
Company abandoned budgets and combined this with a decentralised strategy --> great success
(2004) Huge costs are involved with scaling ABC (one company had 14 dedicated employees)
(1998) Financial analysis is both a science and an art
(2012) If the market value is lower than goodwill, investors must be anticipating an impairment
Combined ABC and big data effectively
Asset is a present economic resource controlled by the __ as a result of a past event. Resource is _ (rather than probable) of bringing future economic benefits
(1968) Financial reports move stock prices

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