2013 accounting news quiz answers


Here are the answers to the 2013 JofA news quiz.

1. Question: What did the PCAOB propose that public company auditor’s reports should include?

Answer: (b) The engagement partner’s name.

Full story: “PCAOB Proposal Could Result in Public Tracking of Auditors

2. Question: Which converged standard did members of FASB and the International Accounting Standards Board (IASB) indicate that they plan to vote in favor of?

Answer: (a) Revenue recognition. The boards expect the final standard to be released in the first quarter of 2014.

Full story: “Final IASB Approval of Rev Rec Standard Imminent

3. Question: What was the subject matter of the first two Private Company Council proposals that FASB endorsed as private company GAAP alternatives?

Answer: (d) Goodwill amortization after business combinations and a simplified hedge accounting approach to certain interest rate swaps. FASB expects to issue final Accounting Standards Updates on these topics in January.

Full story: “Private Company GAAP Exceptions Get Thumbs Up From FASB

4. Question: What did the Committee of Sponsoring Organizations of the Treadway Commission release in May?

Answer: (d) An updated internal control framework.

Full story: “Newly Released COSO Framework a Fresh Look at Internal Control

5. Question: Who took over as the new chairman of FASB?

Answer: (b) Russell Golden. He took over the post July 1 after previous chairman Leslie Seidman’s term concluded.

Full story: “Golden to Succeed Seidman as FASB Chairman

6. Question: What are the four conflict minerals that new SEC regulations require public companies to track in their supply chains?

Answer: (a) Tin, tantalum, tungsten, gold.

Full story: “Conflict Minerals Rule Poses Compliance Challenge

7. Question: After how many years will audit firms be forced to rotate off engagements with public business entities in the European Union under a new agreement that has preliminary approval?

Answer: (c) 10 years. The engagement term can be extended to a maximum of 20 years if the engagement is put out for bid. In cases of joint audits, where multiple audit firms share the engagement, a maximum period of 24 years would be allowed.

Full story: “EU Member States Approve Mandatory Audit Firm Rotation

8. Question: Which government entity in July struck a severe blow to efforts to impose mandatory audit firm rotation in the United States?

Answer: (b) The House of Representatives, whose members voted 321 to 62 in favor of a bill that would prohibit the PCAOB from requiring public companies to use specific auditors or requiring the use of different auditors on a rotating basis.

Full story: “Bill Prohibiting Mandatory Audit Firm Rotation Passes U.S. House

9. Question: What did the PCAOB call the additional items of information it proposed auditors should disclose to make audit reports more informational?

Answer: (d) Critical audit matters.

Full story: “PCAOB Proposes Sweeping Changes to the Auditor’s Reporting Model

10. Question: What is the primary measurement basis for the AICPA’s Financial Reporting Framework for Small- and Medium-Sized Entities, which was released in June to provide a new alternative for small, private businesses in non-GAAP reporting?

Answer: (a) Historical cost.

Full story: “AICPA Unveils Framework Designed for Streamlined Reporting

11. Question: What is the name of the analytical tool the SEC is developing to help its Financial Reporting and Audit Task Force uncover fraudulent financial statements?

Answer: (c) The Accounting Quality Model.

Full story: “What Accounting Fraud Risk Factors Will Attract the SEC’s Attention?”

12. Question: What reasons did commenters cite for disagreement with the widely criticized FASB/IASB reproposal for financial reporting on leases?

Answer: (d) All of the above.

Full story: “Businesses Voice Stiff Opposition to Lease Proposal

Ken Tysiac ( ktysiac@aicpa.org ) is a JofA senior editor.

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