Miscellaneous Quiz / Accounting FHS

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Can you name the Accounting FHS?

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HintAnswer
Old lease standard: Under _ more than _% economic life must be on BS whereas under _ 'major part' of economic life
(2010) Notes how there are incorrect definitions of assets and revenues in the IASB framework and that no definition is given for profit
The ideal framework should make ___ ___ the focal point and most important measurement
The solution to convergence may be to aim for __ instead of standardisation
Environmental costs incurred to measure and detect external costs
(2001) The most fundamental accounting principle is conservatism but this does not have to be mutually exclusive with value relevance.
OCI is not a good predictor of future economic performance
(2015) Zero based budgets help managers focus on HOW to cut costs rather than just which ones.
__-___ 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
Combined ABC and big data effectively
(2006) Convergence would make the dominant standards a monopoly and inhibit innovation.
(1988) Developed ABC
(2007) ABC is only a refinement of traditional costing, has technical limitations and costly implementation and operation
New lease standard from FASB: both _ and _ must appear on balance sheet
Development costs _ under IFRS and _ under GAAP
__ __ didn't make sense for the iPhone
(2001) The most important users of financial statements are investors. Therefore, value relevance is very important
(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.
4 Perspectives of Balanced Scorecard: F_, C_, I_,L_(&Growth)
(2003) Describes the history of accounting as a profession including the replacement of the auditing mentality with a consulting mentality
Performance against KPIs on Balanced Scorecard uses both _ and _ measures
(2010) Negative goodwill is not valued by investors
Organisation that issues guidelines on sustainability reporting. Criticised for promoting lots of reporting rather than efficient reporting
(2010) After IFRS implementation: stock prices of firms with poor standards beforehand rose - stock prices down for firms in code law countries
_ lease if it transfers substantially all the risks and rewards of ownership of the __ to the lessee
Sustainability: __ use of, __ use of or __ use of resources in performing operating activities
(2006) Convergence will improve comparability, market efficiency and could lower barriers to international acquisitins
(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
Costs that occur indirectly through firm actions such as pollution
HintAnswer
BSC provides no __ __
(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
BSC has an overemphasis on _ measures
Environmental costs incurred when there is an indirect cost of actions on firm resources (such as employee health)
Environmental costs incurred when there is an indirect cost of actions on society's resources
(2009) ABC has been dropped by many firms because of its complications
Under FASB, revenue cannot be recognised until a __ __ has occurred in the earnings process
(2005) Predicts that IFRS implementation in Eurozone countries will be telling because of the variance in institutions etc. Expects demand for implementation guidance
__ Agreement (2002) put the IASB and FASB to the task of reducing differences between the two
(2001) Accounting serves an important use for regulatory, stewardship, taxation purposes etc.
(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.
(2007) ABC showed 1 company that only 400 of 1400 customers were profitable (problem lay with small orders)
(2012) Studied lease accounting practice and found 'no support' for conventional wisdom that principles encourage adherence to spirit of standards
(2008) We should focus more on IS than BS (as investors)
(2010) Accepting convergence would show that the US is politically cooperative
(2008) Intangibles generate income indirectly through other tangible assets
(1995) ABC reveals insights about the profitability of products, product lines and customers
(2003) Budgets should be abandoned as they sustain a comman-control culture, are inflexile and encourage gaming for self-interest
Company abandoned budgets and combined this with a decentralised strategy --> great success
(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.
(2014) Fair values are unverifiable. Therefore, the disincentives to manipulate the books are diminished. Leads to unreliability.
The ideal framework should focus __ and __ on __
(2010) Firms operating decisions are affected by ratio considerations
ABC only useful if activities are _ and _
Kaplan and Norton's (1992) sustainable management reporting tool
Periodic report on short, medium and long run value creation
(2010) Ideal conceptual framework should: focus recognition and measurement on transactions, separate operating and financing activities, focus on operating income, conservatism
Revaluation of goodwill impairment allowed under __ not under __
HintAnswer
44% of US companies use Balanced Scorecard
(1998) Financial analysis is both a science and an art
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
Choosing to capitalise rather than expense leads to higher reported _ _
(2010) Survey of managers saw budgets as control tool AND value adding
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.
(2006) Associate the rules-base of GAAP with the Enron scandal
The ideal framework should separate __ from ___ activities
(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.
(2012) If the market value is lower than goodwill, investors must be anticipating an impairment
(2004) Time driven ABC could alleviate the limitations. Managers directly estimate appropriate allocations.
(1993) Braintree hospital used ABC to cope with changing health insurance industry.
(2010) US decision on convergence depends on trade off between one off transition costs and persistent comparability gains.
(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)
(1968) Financial reports move stock prices
(2009) The adoption of IFRS changes the magnitude of key accounting ratios
(2011) There is a perpetual challenge in balancing relevance and reliability
Environmental costs incurred to reduce future environmental costs of operations
(2012) Goodwill write offs are a tacit admission of a managerial cock up
The ideal framework should encourage and harbour __
(2003) Instead of budgets, managers should use peers and competitors as performance benchmarks (effort won't be based on arbitrary targets)
(2004) Huge costs are involved with scaling ABC (one company had 14 dedicated employees)
(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
(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.
Lars Sorensen, CEO of _ _: Sustainability determines profits in the long run

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