Knowledge Checks MCQ and Solutions - Topic 1 PDF

KNOWLEDGE CHECKS: MULTIPLE CHOICE QUESTIONS AND SOLUTIONS | 1 Questions Module 1 Question 1.1 Which three of the following are traditiona...

KNOWLEDGE CHECKS: MULTIPLE CHOICE QUESTIONS AND SOLUTIONS | 1 Questions Module 1 Question 1.1 Which three of the following are traditionally recognised as being attributes of a profession? A the service ideal B extensive preparatory education C substantial financial remuneration D application of professional judgment (EG ID 1.1) Question 1.2 Which three of the following features are included in the concept of ‘service ideal’? A the efficient and effective use of society’s resources B the provision of accounting-related services as cheaply as possible C the pursuit of excellence in accounting practice by the individual professional accountant D the responsibility to behave in a manner that maintains the good reputation of the profession (EG ID 1.2) Question 1.3 Which one of the following describes the way that accounting interacts with society and organisations? A Accounting can change society’s behaviour through changes in accounting policy. B Accounting responds to the needs of society and as such reacts to change rather than creating change. C Accounting is not appropriately placed to make changes in society because accountants are more interested in making money than in seeking what is best for society. D Accounting involves recording and reporting useful information, and, as such, it should remain impartial and objective and not be concerned about people, organisations and societies. (EG ID 1.3) Question 1.4 Which one of the following best describes professional judgment? A the acquisition of knowledge through a formal educational process B the ability to diagnose and solve complex, unstructured ‘values-based’ problems C practical experience that ensures the accounting role can be completed in a professional manner D problem-solving and the ability to apply the right technical solution despite pressure or social ideals (EG ID 1.4) R:\Workgroups\CPA-Production\CPA MCQs and ERs\1st Semester 2016\E&G\EG-Knowledge-check-MCQ_16a.docx DTP: Mira/Ophelia/Jen 3rd set 15b 05-02-16  2 | ETHICS AND GOVERNANCE Question 1.5 Which one of the following is a likely implication for the accounting profession following the collapse of large companies such as Enron, HIH Insurance and Lehman Brothers? A an increase in the profession’s autonomy B increased regulation and greater scrutiny by the regulators C a tendency for the community to have more faith in the accounting profession D a further reduction in the number of large accounting firms resulting from a merger process (EG ID 1.5) Question 1.6 The corporate collapses of the early 2000s and those that occurred during the Global Financial Crisis had some important common themes that we must understand if, as professionals, we are to assist in preventing their recurrence. Which three of the following were common themes of the corporate collapses? A They were the result of directors abusing their trust. B The collapses were not associated with incentive payments and greed. C They had a negative impact on the credibility of the accounting profession. D They demonstrated a willingness of corporations to engage in risks that were not fully understood. (EG ID 1.6) Question 1.7 Which three of the following statements correctly describes a profession? A Professions exist mainly to serve society. B Professions are strictly regulated by external bodies. C Professions have a substantial degree of independence and autonomy. D Professions are given permission to provide services to the public through some regulatory process. (EG ID 1.7) Question 1.8 Accounting meets the traditional attributes of a profession by upholding which three of the following? A achieving in all circumstances the best outcome for the client B specialist skills and experience supported by a well-founded body of knowledge C professional judgment to diagnose and solve complex, unstructured values-based problems D a service ideal in which the reliable quantifying and reporting the basic facts of economic life serves the public interest (EG ID 1.8) R:\Workgroups\CPA-Production\CPA MCQs and ERs\1st Semester 2016\E&G\EG-Knowledge-check-MCQ_16a.docx DTP: Mira/Ophelia/Jen 3rd set 15b 05-02-16  KNOWLEDGE CHECKS: MULTIPLE CHOICE QUESTIONS AND SOLUTIONS | 3 Question 1.9 The multi-dimensional role of the professional accountant in a mid-sized business includes generating value through which three of the following? A managing risk and measuring performance B managing costs through rigorous budgeting and forecasting C looking for external opportunities to invest the capital of the business D creating and implementing management information systems to bolster strategy and decision-making (EG ID 1.9) Question 1.10 The Professional Accountants in Business (PAIB) Committee of IFAC has identified a multi-dimensional role for accountants in generating value for business including which three of the following? A managing risks B upholding integrity C creative accounting D establishing a common ‘performance language’ (EG ID 1.10) Question 1.11 John and his supervisor Elizabeth work as auditors for a hedge fund. When they finalise their annual audit the valuation of the company is far higher than John expected, and he suspects Elizabeth has inflated the valuation to please management and ensure their bonuses. What should John do? A Confront Elizabeth regarding his suspicions. B Nothing, his responsibility is to the company. C Report his suspicions to the hedge fund’s senior management. D Report his suspicion to the General Manager Professional Conduct (GMPC) of CPA. (EG ID 1.11) R:\Workgroups\CPA-Production\CPA MCQs and ERs\1st Semester 2016\E&G\EG-Knowledge-check-MCQ_16a.docx DTP: Mira/Ophelia/Jen 3rd set 15b 05-02-16