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Convergence forCorporate FinancialReporting

Bruce Pounder

Convergence for

Corporate

Financial Reporting

Course Instructions and

Final Examination

The CPE Store819 Village Square Drive

Tomball, TX 773751-800-910-2755

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Convergence for Corporate Financial Reporting

Table of Contents

Page Course Objectives............................................................................................................. 3 Course Instructions .......................................................................................................... 3 Final Examination ............................................................................................................. 5

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COPYRIGHT 2012 - The CPE Store - ALL RIGHTS RESERVED No portion of this material may be reprinted, reproduced, transmitted, stored in a retrieval system, or otherwise utilized, in any form or by any means, electronic or mechanical, including photocopying or recording, now existing or hereinafter invented, nor may any part of this course be used for teaching without written permission from the publisher and the author.

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Course Objectives After completing this course, you will be able to:

Describe the primary objective of external financial reporting in the United States Explain why the economic benefits of standards do not come automatically Discuss what rationale for a company's switching to IFRS would be valid Identify the three factors that will keep you from making swift progress in preparing for the impact of

Convergence Compare the response of the United States to changes in the current standards with the response of other

nations Contrast the main objective of financial reporting as defined in U.S. GAAP with the main objective of

financial reporting as defined in the IFRS Understand the background of the FASB-IASB Joint Conceptual Framework Project List some of the arguments for using a principles-plus-rules approach to setting financial reporting

standards Identify the main objective of the PCFRC Describe what the main differences in standards would likely be under differential financial reporting

standards List the four principal kinds of financial statements that are required under both U.S. GAAP and IFRS Compare and contrast the definition of entry price with that of exit price Identify which type of price measurement is currently used by FASB and, to a lesser extent, IFRS Discuss the future of the LIFO cost-flow assumption for inventory under converged standards Describe how construction interest is likely to be handled under converged standards Explain some of the results of a reclassification of the cash outflows for rent payment Identify the FASB staff position on plan-asset disclosures required under SFAS No. 132(R) Discuss the differing levels of guidance on revenue recognition and measurement standards between the

U.S. GAAP and the IFRS Understand what the current principles that underlie both the U.S. GAAP and IFRS revenue recognition

and measurement standards are based on Compare U.S. GAAP standards for segment reporting with IFRS standards for segment reporting Discuss the topics that were addressed in Phase A of the Financial Statement Presentation Project Describe the purpose of eXtensible Business Reporting Language (XBRL) List the three defining characteristics of the U.S. labor market for financial reporting talent Explain why labor markets for financial reporting have not traditionally been global in scope Discuss the impact of Convergence on employers' demand for KSAs based on country-specific financial

reporting standards List the reasons for the coming changes in the demand for financial reporting KSAs in U.S. labor markets Describe the past use of the term commodity and compare it with how it can be used now Understand the impact of the global homogenization of employer demand Identify those market participants who will benefit from desegregation of labor and those who will not

benefit Discuss a means of on-the job education that has worked well in large companies, but is simply not

feasible for smaller companies Describe the impact of flooding the global labor market with relatively low-cost talent List the three challenges associated with preparing for the impact of Convergence Discuss the importance of identifying the technical differences between options and describe how to

assess the impact of those differences Identify and discuss each of the four core activities of talent sourcing Understand what a gap analysis is and know how to use one Describe the number one threat to the career of a financial manager

Course Instructions To fully benefit from this course, please follow all of the steps below. 1. Read each chapter in the text to get a good understanding of the material. 2. Answer the study guide problems which appear at the end of each chapter. After answering the problems,

compare your answers with the correct answers to ensure that you understand the material.

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3. When you feel that you have a good understanding of the material contained in the chapter, answer the questions on the final examination.

4. When you have completed the final examination, submit your answers for grading. A score of 70% or better is

required to pass. Please also complete the course evaluation that accompanied the course and submit it to us along with your answer sheet. Upon passing you will receive a Certificate of Completion stating that you have successfully completed the course and earned the continuing education credit.

Prerequisites and Advance Preparation No prerequisites or advance preparation are required for this course. CPE Credit This course is recommended for 20 CPE credits. Final Exam Grading ► Online: Our fastest option, with instant results. Simply go to www.cpestore.com and click the link for

online grading. Just follow the instructions from there. When you finish entering your answers, you’ll receive instant test results and a Certificate of Completion to print.

► By Mail: Mail your test and course evaluation to us in the envelope provided. We grade the tests the day we

receive them and mail the results and Certificate of Completion to you the following business day. ► By Fax: Please use this option only if you need fast turnaround (we want to keep this as a free service).

Just fax your answer sheet to 1-281-255-4337. If you need us to fax the Certificate of Completion back to you, please provide us with your fax number and write “please fax back” on your answer sheet. If you don’t need the Certificate faxed back, please write “no fax needed” on your answer sheet.

Refunds The CPE Store guarantees your satisfaction. If, for any reason, you are not completely satisfied with your purchase, return it to us unused within 30 days for a prompt refund, no questions asked. (Sorry, but shipping fees are not refundable.) Customer Service The CPE Store holds itself to the highest standards. If we have not met your expectations, something is missing, or you just have a question please contact us at 1-800-910-2755 or customerservice@cpestore.com. About Our Courses The CPE Store's courses are developed to satisfy the continuing education requirements of the American Institute of Certified Public Accountants, each state's Board of Accountancy and the National Association of State Boards of Accountancy (NASBA). If your state requires registration of sponsors, our sponsor number will appear on your Certificate of Completion. Our courses are designed to meet the continuing education requirements of accounting professionals. A great deal of care has been taken to ensure that the course material is both interesting and relevant to the practice of accounting. The information presented is, to the best of our knowledge, current and accurate. However, The CPE Store is not in the business of rendering legal, accounting or other professional advice and as such, the material presented in our courses is intended as an overview. If legal advice or other expert assistance is required, the services of a competent professional should be sought.

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Convergence for Corporate Financial Reporting 20-Hour Course

Final Examination

Answer each question on the accompanying answer sheet. A score of 70% or higher is required to pass the exam. If you score less than 70% on your first attempt, we will allow you to take the test a second time. Chapter 1 – Introduction to the Convergence of Financial Reporting Standards 1. In developed economies, standard-setting and standard-enforcing activities are typically carried out on

behalf of which of the following? A. Investors B. Creditors C. The general public D. All of the above 2. One of the ways that the term “financial reporting standards” is used in the book is to refer to any

prescriptive guidance pertaining to which of the following? A. The use of financial reports B. Hiring standards for financial staff C. Newspaper reporting on financial issues D. The process of preparing financial reports 3. Which of the following is one of the meanings of the word “Convergence”? A. The ongoing efforts of financial reporting standard setters in the United States and around the world to increase the number of differences in financial reporting standards among countries B. The adoption of U.S. GAAP by all other countries in the world C. The ongoing efforts of financial reporting standard setters in the United States and around the world to eliminate differences in financial reporting standards among countries D. Public companies will have a choice as to which set of financial reporting standards they will use 4. Which of the following is one of the three main points to remember about Convergence from a U.S.

perspective? A. Both the U.S. GAAP and the IFRS have changed significantly as a result of Convergence B. Convergence will mean that all countries must adopt U.S. GAAP C. The global standards that we will end up with will simply be cobbled together from the U.S.

GAAP and the IFRS standards D. The world is moving away from Convergence and towards unique reporting standards for each

country Chapter 2 – How Convergence Will Impact the United States 5. What are two prominent examples of standards within the U.S. GAAP that have recently undergone

significant, unilateral change so as to converge with International Financial Reporting Standards (IFRS)? A. U.S. tax reporting and partnership accounting standards B. Accounting for business combinations and employee stock options C. Accounting for business combinations and partnership accounting standards D. U.S. tax reporting and employee stock options 6. Which of the following is a likely scenario for privately held companies in the U.S.? A. Privately held companies will use the same global standards as publicly held companies B. Privately held companies will not need to follow standards at all C. Privately held companies will have the option to use the current version of U.S. GAAP D. Many privately held companies will go out of business because they will not be able to adapt

Final Exam

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7. Which of the following would be a chief benefit of U.S. issuers having the ability to adopt IFRS? A. Investment in U.S. companies would be less attractive to foreign sources of capital B. Investment in foreign companies would be more attractive to U.S. sources of capital C. Investment in U.S. companies would be more attractive to foreign sources of capital D. Investment in foreign companies would be less attractive to U.S. sources of capital 8. Which of the following is true about the transition from current U.S. GAAP to converged financial

accounting standards? A. It has the potential to bring many economic benefits to the United States B. It will be easy C. It will be fast D. It will be cheap Chapter 3 – Prepare for the Impact of Convergence Now 9. Which of the following is a factor that will impede you, your department, and your company from making

swift progress in your preparations for the impact of Convergence? A. The need to hire a specialist B. A lack of information C. The need to register each change that you intend to make D. Too much information 10. How will Convergence put your employability at risk? A. Financial reporting talent will no longer be needed since most managers will be able to perform financial reporting tasks themselves B. There will be so much demand for financial professionals that they will burn out quickly C. It won’t D. The emerging global market for financial reporting talent will become hypercompetitive 11. In terms of anticipating and responding to changes in current standards, the United States is what

compared to other countries? A. Ahead B. About the same C. Much better off D. Significantly behind Chapter 4 – Conceptual Frameworks 12. A ____________________________ for a set of financial reporting standards states the fundamental concepts

on which that set of standards is based. A. Mission statement B. Conceptual framework C. Governance policy D. Fundamentals statement 13. In the IFRS conceptual framework, the objective of financial statements is to do what? A. Provide information about the financial position, performance, and changes in financial position of an entity that is useful to a wide range of users in making economic decisions B. Provide information that is useful to present and potential investors and creditors and other users in making rational investment, credit, and similar decisions C. Provide information that is completely accurate and can be verified by an independent auditing organization D. Provide a guarantee of a company’s performance to investors in the form of verifiable financial projections and historical data

Final Exam

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14. Phase B of the FASB-IASB Joint Conceptual Framework Project is to examine which of the following concepts?

A. Historical background of accounting concepts B. Objective and qualitative characteristics C. Elements and recognition D. Measurement 15. The definition of an asset as a “probable future economic benefit obtained or controlled by a particular

entity as a result of past transactions or events” is a part of which conceptual framework? A. IFRS B. FASB-IASB Joint Conceptual Framework Project C. U.S. GAAP D. SEC 16. Which of the following is a tentative definition of a reporting entity as developed by the FASB-IASB Joint

Conceptual Framework Project? A. A circumscribed area of business activity of interest to present and potential equity investors,

lenders, and other creditors in making decisions in their capacity of capital providers without regard to whether the business activity is structured as a legal entity

B. An organization with publicly held stock that is available to equity investors on the open market C. A specific business organization that interacts with equity investors, lenders, and creditors and is

also legally structured as a single entity D. Any organization with the legal, moral, or implicit responsibility to provide the general public with

accurate and informative financial information Chapter 5 – Principles-Based Standards 17. Which of the following is one of the key differences between principles and rules? A. Principles are specific in nature, while rules are general in nature B. Principles describe how to do something, while rules describe what should be done C. There tend to be many principles, while there are usually few rules D. Principles are general in nature, while rules are specific and detailed 18. Which of the following is the main argument in favor of a principles-alone approach? A. A set of financial reporting standards composed solely of a relatively small number of general principles would be harder to develop, harder to understand, and harder to apply than if the set contained rules in addition to principles B. Relying on principles alone would result in overly simplistic accounting for inherently complex events and transactions C. Rules are not necessary to faithfully represent the economic substance of complex transactions

and events D. A set of financial reporting standards composed solely of a relatively small number of general

principles would be easier to develop, easier to understand, and easier to apply than if the set contained rules in addition to principles

19. Which of the following is an argument for using a principles-plus-rules approach to setting financial

reporting standards? A. Rules enhance the auditability of financial information and enhance the enforceability of

standards B. A set of financial reporting standards composed solely of a relatively small number of general principles would be easier to develop, easier to understand, and easier to apply C. Rules sometimes allow the engineering of a transaction so as to produce a particular accounting treatment regardless of whether that treatment accurately represents the economic substance of the transaction D. Rules need not be linked to any principle at all in order to be necessary and effective

Final Exam

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20. Rules are not problematic if they: A. Conflict with each other B. Are consistent with each other C. Impose arbitrary bright-line tests D. Allow too many alternative accounting treatments 21. What is never possible in accounting? A. Complete comparability B. Eliminating rules C. Doing without “safe harbors” D. Staying current with changes in the world’s economy Chapter 6 – Different Standards for Different Companies 22. What are the three size-specific regulatory differences used by the SEC? A. Small, medium, and large B. Under 500 employees, 500 employees to 2,000 employees, and over 2,000 employees C. Income of under $100,000, income of 100,000 to 1,000,000, and income of over $1,000,000 D. Nonaccelerated, accelerated, or large accelerated 23. What is the name of the IASB differential standard-setting initiative? A. Standard Examination Project (SEP) B. Private Company Financial Reporting Committee (PCFRC) C. Securities and Exchange Commission (SEC) D. Small and Medium-Sized Entities (SMEs) project 24. What is an argument against differential reporting standards? A. They have the potential to reduce the complexity of financial reporting for many, if not most,

reporting entities B. Small companies generally don’t want differential reporting standards C. It would diminish the quality of financial reporting for entities that use “inferior” standards D. They would improve the comparability of financial statements across entities of different kinds 25. Out of a total of approximately six million businesses in the United States, how many would be segregated

into the publicly held group? A. Less than one percent B. Two to four percent C. Approximately twelve percent D. Twenty-two percent Chapter 7 – Financial Statements: A First Look 26. What document, soon to be published, will completely change the way that U.S. GAAP is documented,

updated, referenced, and accessed? A. Sarbanes-Oxley Act (SOX) B. FASB’s Accounting Standards Codification C. The Convergence Guidebook D. Financial Reporting Standards for Smaller Entities 27. The International Financial Reporting Interpretations Committee (IFRIC) is associated with what

organization? A. AICPA B. FASB C. IASB D. SEC

Final Exam

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28. Under both U.S. GAAP and IFRS the balance sheet is intended to show what? A. Current income of the entity B. Whether or not the company has a “balanced” pool of employees C. A “snapshot” of the entity’s financial position D. A summary of how and why the balances of various equity accounts changed during the

reporting period 29. Under U.S. GAAP, what standard details the requirements for the Statement of Cash Flows? A. SFAS No. 95 B. FASB Codification Subtopic 230-15 C. IAS 7 D. IFRIC 14 Chapter 8 – Fair Value and Related Measurement Issues 30. Because the FASB, IASB, and their predecessors have incorporated dozens of different measurement

attributes into the measurement provisions of U.S. GAAP and IFRS, each set of standards is often described as being based on what?

A. A fixed-attribute measurement model B. A living document C. A subjective-attribute measurement model D. A mixed-attribute measurement model 31. What are the two fundamental kinds of prices? A. Fixed prices and variable prices B. Set prices and negotiable prices C. Overhead costs and cost of goods sold D. Entry prices and exit prices 32. After the value-price distinction, what is the second key property of measurement attributes? A. Historic cost B. Physical location C. Market demand D. Time orientation 33. Which of the following is a definition of fair value? A. The price that would be paid to buy an asset or receive a liability in a subjective transaction

between market participants in the principal or most disadvantageous market as of the measurement date

B. The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal or most advantageous market as of the measurement date

C. The price that would be received to sell an asset or paid to transfer a liability between related parties in a closed market as of the measurement date

D. There is no adequate definition of fair value 34. Which of the following is one of the two “big picture” criticisms of implementing fair value measurement

standards? A. Existing fair value measurement standards may amplify cyclical swings in financial markets B. Existing fair value measurement standards diminish the comparability of financial statements

across entities of different kinds C. Existing fair value measurement standards introduce wasteful segregation into standard-setting

and professional education processes D. Existing fair value measurement standards amplify, rather than diminish, the problem of

standards overload among users, auditors, and preparers of financial statements

Final Exam

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Chapter 9 – Major Asset Clause 35. Under IFRS, what standard applies to inventory? A. ARB 43 B. SFAS 151 C. IFRIC 20 D. IAS 2 36. Under U.S. tax law, companies that use LIFO for tax purposes must use what for financial accounting and

reporting purposes? A. FIFO B. Weighted average method C. LIFO D. Retail method 37. Converged standards will likely require capitalization of what? A. Maintenance and repair costs B. Construction interest C. Cost of goods sold D. Operating costs Chapter 10 – Other Balance Sheet Items 38. Which set of standards allows the subclassification of capital leases into sales-type leases and direct

financing leases? A. U.S. GAAP B. IFRS C. Both D. Neither 39. Which set of standards generally requires the immediate recognition of gain or loss on sale-leaseback

transactions for operating leases? A. U.S. GAAP B. IFRS C. Both D. Neither 40. What document proposes that categories of plan assets, if significant, should be disclosed? A. Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements B. The Sarbanes-Oxley Act of 2002 C. Framework for the Preparation and Presentation of Financial Statements, issued by the IASB in

2001 D. FASB Staff Position (FSP) No. 132(R)-a, published in March 2008 41. What is the IASB-proposed additional category of benefit plan that would eliminate the ambiguity that

exists under current standards for classifying plans called? A. Defined benefit B. Defined contribution C. Contribution based D. Miscellaneous benefit Chapter 11 – Reporting Financial Performance 42. Under the earning process approach to revenue recognition, what is the criterion for recognizing revenue? A. Direct reference to changes in assets and liabilities of the entity B. The process of earning the revenue must be complete C. That expenses were incurred D. Undefined

Final Exam

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43. Under the asset-liability approach, how revenue is measured depends on what? A. A subjective “snapshot” of the organization at a given point in time B. How the organization receives payment, and when C. How the underlying rights-based assets and performance-obligation liabilities are measured D. How much debt the organization has 44. For cash flow statements, what concept is likely to be discarded when Convergence is complete? A. Extraordinary items B. Cash equivalents C. Fair value D. Historical cost Chapter 12 – Business Combinations, Intercompany Investments, and Segment Reporting 45. Under which set of standards will an investor be presumed to have significant influence if the investor holds

20% or more of the voting power? A. U.S. GAAP B. IFRS C. Both D. Neither 46. Under which current set of segment reporting standards is disclosure for vertically integrated segments

encouraged but not required if reportability criteria are satisfied? A. Neither U.S. GAAP nor IFRS B. U.S. GAAP C. Both U.S. GAAP and IFRS D. IFRS 47. One of the thorniest issues in segment reporting under U.S. GAAP and now IFRS is what? A. Whether or not to use fair value B. Comparability across entities may be quite low C. The laws of each individual country may contradict converged standards for segment reporting D. Comparability across entities may be too high Chapter 13 – Financial Statements: What Is Ahead 48. The scope of the Financial Statement Presentation Project does not include which type of entity? A. Private entities B. Nonbusiness entities C. Public entities D. Small businesses 49. Which of the following is not on the list agreed upon by FASB and IASB for a complete set of financial

statements? A. Statement of depreciation B. Statement of cash flows C. Statement of changes in equity D. Statement of comprehensive income 50. Which of the following is an issue to be addressed in Phase B of the Financial Statement Presentation

Project? A. Deciding what constitutes a complete set of financial statements and the requirements for

presenting comparative financial information B. Defining the totals and subtotals to be reported on each financial statement C. Deciding what financial statements are to be included in an interim financial report D. Deciding whether to expense or capitalize construction interest

Final Exam

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51. When presenting information within the financial statements, which of the following is not one of the main categories used?

A. Business B. Financing C. PP&E D. Income taxes 52. Within the proposed statement of comprehensive income, functional line items will detail which of the

following? A. Sales revenue, cost-of-sales, and marketing expenses B. Depreciation methods C. Personnel policies and members of the board of directors D. Historical versus fair value costs 53. Which of the following is a format for exchanging and storing financial information? A. Format for Exchange (FOREX) B. HyperText Markup Language (HTML) C. Generally Accepted Accounting Principles (GAAP) D. Extensible Business Reporting Language (EXBRL) Chapter 14 – Overview of U.S. Labor Markets for Financial Reporting Talent 54. Traditionally, what is true of labor markets for financial reporting talent? A. They have been global in scope B. They have not been global in scope C. They are a relatively new phenomenon D. They have been “glutted” with talent 55. U.S. labor markets for financial reporting talent have developed around what kind of a product? A. One that is identical from what is bought and sold in other countries’ labor markets B. One that has little value to U.S. employers C. One that is in high demand worldwide D. One that is highly differentiated from what is bought and sold in other countries’ labor markets 56. The pipeline of financial reporting talent in the United States consists of what? A. A global network of talented financial professionals B. Only those financial professionals familiar with IFRS C. Individuals, institutions, and activities that collectively supply financial reporting talent to U.S.

labor markets D. A large pool of unemployed individuals looking for work Chapter 15 – Obsolescence of Knowledge, Skills, and Abilities 57. Which of the following is not one of the KSAs? A. Abilities B. Skills C. Attitude D. Knowledge 58. Which of the following is a reason for the coming changes in the demand for financial reporting KSAs in

U.S. labor markets? A. Private companies in the U.S. will never use anything other than U.S. GAAP B. Public companies worldwide will eventually be required to adopt U.S. GAAP C. Public companies in the United States will eventually be required to adopt the future set of

country-neutral financial reporting standards D. Some companies will elect not to adopt current IFRS standards

Final Exam

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59. How many workers will be affected by quantitative structural changes in employers’ demand for financial reporting talent?

A. None B. Nearly everyone C. A relatively small number of workers D. Large numbers of workers 60. Which of the following is true of qualitative changes in employers’ demand for financial reporting talent? A. Qualitative changes will affect almost no workers in the market B. Qualitative changes will affect almost all workers in the market C. Qualitative changes will affect only a relatively small number of workers D. There will be no qualitative changes under Convergence 61. Even a relatively small shift in demand towards KSAs based on current IFRS could redistribute

opportunities in a manner similar to the impact of what recent U.S. Act? A. Americans with Disabilities Act B. Sarbanes-Oxley Act C. The Health Insurance Portability and Accountability Act D. U.S. Copyright Act 62. Workers who participate in U.S. labor markets for financial reporting talent will be challenged to acquire

new KSAs as Convergence renders existing KSAs based on current __________________________ obsolete. A. SEC models B. Codification standards C. IFRS D. U.S. GAAP Chapter 16 – Commoditization of Talent 63. Workers who choose to adapt their financial reporting KSAs to the changing demand of employers will find

what? A. They are acquiring the same KSAs that workers throughout the rest of the world are acquiring B. Their skills are becoming obsolete C. The knowledge that they acquire is useless D. They are differentiated from the rest of the globe in their skill set 64. Individual employers are no longer confined to country-specific labor markets by what? A. International KSAs B. Law C. Country-specific KSAs D. Cultural barriers 65. Employers in labor markets having a lesser supply of commoditized financial reporting talent have begun to

enter what? A. Labor markets in countries having a greater supply of commoditized financial reporting labor B. Crisis mode C. A period of growth and educational training D. Labor markets in countries having a lesser supply of commoditized financial reporting labor Chapter 17 – Toward a Global Labor Market for Financial Reporting Talent 66. Which of the following is not one of the constraints on the markets’ geographic scope? A. Physical constraints B. Possible constraints C. Legal constraints D. Cultural constraints

Final Exam

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67. Companies employing teleworkers have been created outside of the United States specifically for what purpose?

A. Evading U.S. income taxes B. Studying financial theory C. Selling workers’ labor to U.S. employers on a contractual basis D. Selling U.S. workers’ labor to foreign employers on a contractual basis 68. Why are certified public accountants (CPAs) enjoying greater interstate mobility? A. Because of the greater affordability of transportation B. As a result of the rise of telecommuting C. Because many of them are dual certified D. As a result of the ongoing efforts of the American Institute of CPAs (AICPA) and the National

Association of State Boards of Accountancy (NASBA) 69. When segregated commodity markets desegregate, economic theory predicts that the level of ____________

in the combined market will be greater than the level that existed in the separate markets. A. Resources B. Profitability C. Competitiveness D. Value 70. In competitive markets, sellers find themselves in the position of being what? A. Price takers B. Highly in demand C. Obsolete D. Overvalued 71. Parallels exist between what is happening now in the financial labor market and what has happened in the

past in which labor market? A. IT market B. Health professional market C. Education market D. Blue collar market Chapter 18 – Transformation of the Talent Supply Pipeline 72. Which of the following is a secondary function that financial reporting talent pipelines perform? A. Diversity training B. Job placement C. Certification of individual workers’ KSAs D. Education 73. KSAs bought and sold in U.S. labor markets for financial reporting talent have traditionally been based

upon what? A. International Financial Reporting Standards (IFRS) B. U.S. generally accepted accounting principles (GAAP) C. A loosely constructed set of principles independent of specific principles D. The requirements to become a Certified Financial Planner (CFP) 74. Which of the following is a problem with college accounting programs in the U.S.? A. They are ahead of the KSAs that graduates are expected to possess B. They are unable to change quickly in response to changes in the KSAs that graduates are

expected to possess C. There is no problem with college accounting programs in the U.S. D. They are too expensive for most workers to afford

Final Exam

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75. Hundreds of thousands of U.S. certified public accountants are subject to what as a condition of maintaining licensure and/or membership in professional associations?

A. Expensive fees B. Intense scrutiny by their peers C. A minimum number of service hours D. Continuing professional education (CPE) requirements 76. The educational and certification functions of the U.S. supply pipeline for financial reporting talent suffer

from a significant lack of: A. Agility B. Availability C. Relevance D. Competitiveness Chapter 19 – Overview of the Challenges of Convergence 77. Which of the following is not a reason why U.S. financial managers are not adequately prepared for the

impact of Convergence? A. Lack of KSAs B. Skepticism C. Lack of competitiveness D. Lack of awareness 78. What are the three challenges associated with preparing for the impact of Convergence? A. The enterprise challenge, the departmental challenge, and the personal challenge B. The financial challenge, the philosophical challenge, and the practical challenge C. The geographic challenge, the language challenge, and the cultural challenge D. The personal challenge, the philosophical challenge, and the language challenge 79. In the U.S., any company larger than a sole proprietorship has been almost certain to choose what type of

financial reporting standard? A. IFRS B. Canadian GAAP C. Cash method D. U.S. GAAP 80. In the future, individual financial managers face a future of having to compete for their jobs in what kind of

market? A. A global, hypercompetitive labor market B. A soft market C. A narrow, country-specific labor market D. An Americanized labor market Chapter 20 – The Enterprise Challenge: Strategies for Choosing Standards and Implementing Your Choice 81. With regard to financial reporting standards, the world is moving toward what set of standards? A. U.S. GAAP B. IFRS C. CAQ D. A converged set of standards 82. Which of the following is a step in the book’s method of choosing the optimal set of financial reporting

standards? A. Determine who will choose B. Contact a government representative C. Sign up for certification D. Identify the technical similarities between options

Final Exam

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83. Which of the following steps in the methodology for choosing the optimal set of financial reporting standards for your company is a governance issue?

A. Determine who will choose B. Identify the technical differences among options C. Define your company’s options D. Assess the impact of the technical differences among options 84. When identifying the technical differences among options you can ignore what? A. Differences that you don’t understand B. Differences that are relevant to your company C. Nothing D. Differences that are not relevant to your company 85. When assessing the impact of technical differences among the options you should assess the financial and

operating impact of what? A. Training your staff B. The legal changes in your country C. Making the wrong choice D. Any different accounting and reporting policies 86. Risk management starts by asking what question? A. How much will this cost? B. What is my goal? C. What do I know now? D. What could go wrong? 87. Project management begins with which of the following? A. An approved project budget B. A very specific goal that must be clear to everyone involved in the project C. A meeting to discuss the nature and scope of the project D. A detailed schedule that everyone involved in the project must follow Chapter 21 – Departmental Challenges: Tactics for Managing Talent 88. When identifying your department’s present and future needs, it is helpful to differentiate between which

two types of needs? A. Real talent needs and phantom talent needs B. Skilled and unskilled talent C. Paid and volunteer workers D. Ongoing talent needs and transitional talent needs 89. An example of a KSA that your department might need to source includes which of the following? A. Doctorate-level KSAs B. Unskilled KSAs C. Transitional managerial KSAs D. Entry-level KSAs 90. Companies should identify, quantitatively and qualitatively, the KSAs that their departments will require on

a year-by-year basis for at least ______ years. A. Two B. Five C. Six D. Ten 91. One of the core activities of talent sourcing is to engage what kind of workers? A. Workers that your company can afford to hire B. Workers who are at the beginning of their career and can be trained C. Workers whom you have identified as potential providers of the financial reporting KSAs that

your department needs D. Workers who have years of experience behind them

Final Exam

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92. The fourth core activity of talent sourcing is what? A. Setting the compensation of the financial reporting workers that you wish to engage or that you

have engaged B. Engaging workers whom you have identified as potential providers of the financial reporting

KSAs that your department needs C. Retaining workers whom you want to retain D. Identifying workers who could potentially provide the financial reporting KSAs that your

department needs 93. The effectiveness of training and development is heavily dependent on what? A. Money spent B. Timing C. Willingness of the employees to learn D. Quality of the training 94. Regardless of whether a company uses U.S. GAAP or IFRS in the short term, _______________ will require

all department personnel to continually update their KSAs as each set of standards undergoes profound change.

A. Convergence B. Evolution C. Commoditization D. Financial reporting 95. If your company is large enough, what might you wish to consider establishing? A. A rewards system for those who learn IFRS B. An in-house Convergence consultant C. A national training center for employees of any company on Convergence D. A Convergence “center of excellence” or “community of practice” Chapter 22 – Personal Challenge: Career Choices for a Hypercompetitive Labor Market 96. When you take stock you should do what? A. Assess your situation B. Wait for a solution to come to you C. Take action D. Rely on others to manage your career direction 97. To be relevant you should do which of the following? A. Find out what your company needs and meet the need B. Go back to school C. Actively pursue career opportunities that will enable you to gain experience in areas of growing demand D. Become an expert 98. Which of the following is not a means of improving your visibility? A. Writing articles and/or maintaining an online blog B. Serving on a committee or project team within a professional association C. Being a media resource D. Doing your job competently and professionally 99. One of the few ways to be distinct is to be what? A. First B. Competent C. Affordable D. Last

Final Exam

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100. Which of the following is not listed in the text as a way employees can set themselves apart from the crowd? A. Be visible B. Be flexible C. Be multilingual D. Be distinct

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