chapter 3

The IASB sets standards for the private and the public sectors.

Which of these statements in relation to the regulation of auditors is not true?

International Standards on Auditing (ISA) are developed by the IASB

Agency theory assumes that the interests of principals and agents are generally aligned.

In 2008 the SEC agreed to permit foreign registrants to file accounts that follow international accounting standards without reconciliation with US GAAP.

Regulatory capture is said to occur in which of the following situations?

Which of these is not an assumption underlying the public-interest theory of regulation?

The IASB sets standards for:

The Norwalk Agreement is the name of the IASB and the FASB convergence program.

Private interest theory asserts:

Individual countries must decide the extent to which IASB standards will be followed by public sector entities.

A limitation of theories of regulation such as public interest theory and capture theory is that they are not mutually exclusive.

Which of these is a criticism of the public interest theory of accounting regulation?

Under the regulatory capture theory of regulation interest groups are assumed to try to gain control of the regulator to achieve their desired wealth distribution.

Private interest theory suggests that government intervention in the standard setting process is to rectify failures in the market for accounting information.

Prior to 2005 International Accounting Standards (IAS) were influential in which of the following ways?
I They were adopted for use in countries without national standards
II They were used in the development of national standards
III They were used voluntarily in preparing consolidated accounts in some countries

Which of these factors should not affect the extent to which particular countries are able to influence the international standard-setting process?

Regulatory capture has been found to be particularly pronounced in which of the following situations?

Which theory of regulation assumes that politicians are not neutral arbiters?

In relation to accounting and auditing which of these is not a theory of regulation?

The development of international accounting standards began in 1990 with the formation of the International Accounting Standards Board.

In the application of agency theory to accounting the principals most often considered are investors and lenders and the agents most usually considered are managers.

Public-interest theory shows that capital markets are performing more efficiently as a result of government intervention in the standard-setting process.

Which of these is not an assumption underlying regulatory capture theory?

US GAAP have been described as principles-based standards and IAS standards as rule-based.

Proponents of the free-market approach to the provision of accounting information advocate that:

Regulatory capture is more likely to occur when the regulatory agency has individual members who have the potential to be employed in the future by the industry they are involved in regulating.