Here are the answers to the 2012 Journal of Accountancy news quiz:
1. Question: What is the name of the new body the Financial Accounting Foundation (FAF) created to debate and vote on possible GAAP exceptions and modifications for private companies?
Answer: (b) The new Private Company Council (PCC) held its initial meeting Dec. 6 and identified VIEs, certain interest-rate swaps, intangible assets acquired in business combinations, and uncertain tax positions as its initial areas of focus. The PCC meets again Feb. 12.
Full story: “VIEs Among First Issues PCC Identifies for Discussion.”
2. Question: What did the report the SEC staff issued in July recommend with regard to U.S. public companies preparing their financial statements in accordance with IFRS?
Answer: (d) The SEC report did not make a recommendation with regard to whether U.S. public companies should be allowed or required to file financial statements in accordance with IFRS. The matter is in the hands of the SEC commissioners, but no timetable for consideration of the issue has been announced.
Full story: “Still in Flux: Future of IFRS in U.S. Remains Unclear After SEC Report.”
3. Question: What organization is developing a special-purpose financial reporting framework for small and medium-size entities (SMEs)?
Answer: (a) The AICPA is developing a special-purpose financial reporting framework for small and medium-size entities (SMEs). The comment deadline for an exposure draft the AICPA has issued is Jan. 30.
Full story: “AICPA Proposes Financial Reporting Framework for SMEs.”
4. Question: What was the net effect of the November elections on the number of CPAs in Congress?
Answer: (a) The number of CPAs in Congress is increasing as a result of November’s elections. There will be 10 CPAs in the House of Representatives, up from eight. Two accountants in the Senate, Mike Enzi, R-Wyo., and Ron Johnson, R-Wis., were not up for reelection in 2012.
Full story: “CPA Representation Grows in Congress With Reelections, Likely House Newcomers.”
5. Question: The new conflict minerals regulation implemented by the SEC was a result of which federal law?
Answer: (b) Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, P.L. 111-203, requires annual reporting on whether U.S. public companies use conflict minerals (gold, tin, tantalum, and tungsten) originating in the Democratic Republic of the Congo or neighboring countries. The first Conflict Minerals Reports are due May 31, 2014, to report on the 2013 calendar year.
Full story: “Build a Strong Team to Comply With Conflict Minerals Rule.”
6. Question: The SEC in December approved a PCAOB standard regulating communication between public company auditors and whom?
Answer: (a) A new PCAOB standard encouraging a robust dialogue between public company auditors and audit committees was approved by the SEC in December. Auditing Standard No. 16, Communications With Audit Committees, is designed to facilitate effective, two-way communication. It takes effect for audits of financial statements with fiscal years beginning on or after Dec. 15, 2012.
Full story: “SEC Approves PCAOB Standard on Communication With Audit Committees.”
7. Question: A converged standard on which topic is scheduled to be released by FASB and the International Accounting Standards Board in the first half of 2013?
Answer: (b) FASB and the IASB are expected to release a new, converged standard on revenue recognition in the first half of 2013. As proposed, the standard would define a five-step process for recognizing revenue when or as an entity satisfies a performance obligation.
Full story: “FASB, IASB Tentatively Change Revenue Recognition Constraint.”
8. Question: Who among the following leaders announced in 2012 that they were stepping down?
Answer: (e) SEC Chief Accountant James Kroeker, SEC Chairman Mary Schapiro, GASB Chairman Robert Attmore, and FAF Board of Trustees Chairman John Brennan all announced in 2012 that they were stepping down. Successors have been named for Kroeker (Paul Beswick), Schapiro (Elisse Walter), and Brennan (Jeffrey Diermeier).
Full stories: “SEC Chief Accountant Kroeker to Step Down”; “SEC Chairman Schapiro to Step Down; Walter Designated as Replacement”; “GASB Chairman Attmore Retiring in June”; “Diermeier Replaces Brennan as Chair of FAF Board of Trustees.”
9. Question: What is the Committee of Sponsoring Organizations of the Treadway Commission (COSO) doing to the popular internal control framework it first issued in 1992?
Answer: (d) The Committee of Sponsoring Organizations of the Treadway Commission (COSO) is updating its popular internal control framework to make it more relevant to a business environment that has changed considerably in the 20 years since it was first issued. The framework, along with accompanying documents on internal control over financial reporting and illustrative tools for implementation, is scheduled to be released in the first quarter of 2013.
Full story: “Internal Control, Revisited.”
10. Question: What is the name of the new body established to encourage diversity in the accounting profession?
Answer: (c) The National Commission on Diversity & Inclusion is attempting to create a more diverse profession, with a focus on increasing the retention and advancement of under-represented minorities.
Full story: “Newly Formed Commission Will Focus on Increasing Diversity in the CPA Profession.”
11. Question: Which state in September became the 49th state to pass CPA mobility legislation?
Answer: (d) California Gov. Jerry Brown in September signed a law allowing CPAs from outside the state to represent clients in California without being subject to additional license requirements. The law takes effect on July 1, 2013.
Full story: “California Becomes 49th State to Pass CPA Mobility Law.”
12. Question: Which designation was launched in January 2012 as part of an effort to elevate the practice of management accounting?
Answer: (c) The Chartered Global Management Accountant (CGMA) designation was launched in January 2012 to elevate the practice of management accounting. The designation grew out of a partnership between the AICPA and the Chartered Institute of Management Accountants (CIMA). For more on the CGMA designation, click here.
Full story: “Melancon: Making Sense of a Changing and Complex Profession.”
—Ken Tysiac (firstname.lastname@example.org) is a JofA senior editor.