ACC80005 Financial Accounting Theory

This section contains 20 multiple choice questions. Answer all questions. 
1.    Critical researchers accuse financial accounting of:
(A)    Being open to manipulation by self-interested managers.
(B)    Reinforcing unequal distributions of wealth and power.
(C)    Being irrelevant to management decision-making.
(D)    Giving inaccurate predictions of share price movements.
2.    Critical researchers believe that accounting information:
(A)    Is neutral and unbiased.
(B)    Benefits neither the rich nor poor.
(C)    Is used by the elite to maintain their power.
(D)    Challenges existing social orders.
3.    Critical researchers believe: 
(A)    They are objective and neutral, but that non-critical researchers are biased and partisan.
(B)    They are biased and partisan, but that non-critical researchers are objective and neutral.
(C)    That both critical and non-critical researchers are objective and neutral.
(D)    That both critical and non-critical researchers are biased and partisan.
4.    Critical researchers interpret the post-Enron increase in mandatory corporate reporting as primarily benefiting: 
(A)    Society, as corporations are required to improve their level of disclosure.
(B)    Corporations, as confidence will be restored to financial markets.
(C)    Employees, as fewer companies will go bankrupt.
(D)    Accountants, as demand for accounting services, will increase.


5.    Behavioural research is concerned with how: 
(A)    Individuals behave when provided with particular items of information.
(B)    Individuals should behave when provided with particular items of information.
(C)    Firms behave when provided with particular items of information.
(D)    Firms should behave when provided with particular items of information.
6.    Which of the following statements is true when comparing behavioural research with capital markets research?
(A)    Both behavioural research and capital markets research assess the aggregate effect of financial reporting.
(B)    Both behavioural research and capital markets research analyse individual responses to financial reporting.
(C)    Behavioural research analyses individual responses to financial reporting, while capital markets research assesses the aggregate effect of financial reporting.
(D)    Capital markets research analyses individual responses to financial reporting, while behavioural research assesses the aggregate effect of financial reporting.
7.    Which of the following statements is not true about behavioural research?
(A)    There can ultimately be a normative component to behavioural research.
(B)    Behavioural research can be classified as positive research because it seeks to explain particular actions or behaviours.
(C)    Behavioural research is typically grounded in organisational theory and theories from psychology and sociology.
(D)    Behavioural research is an example of economics-based theories where assumptions about what motivates human actions are made and such motivations are attributed to all individuals.
8.    Capital markets research as


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