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CPA Australia CPA Financial Accounting and Reporting Sample Questions:
1. Published financial statements are regulated by
A) accounting and legal rules to ensure the provision of relevant and reliable financial information to shareholders.
B) shareholders who specify the framework for the provision of consistent and comparable financial information for decision-making.
C) International Financial Reporting Standards to ensure the provision of useful financial information to shareholders.
D) rules to ensure the provision of consistent financial information to investors.
2. Which one of the following statements differentiates semi-strong form efficiency from strong form efficiency in the context of the efficient market hypothesis?
A) Semi-strong form efficiency reflects all past price movements whereas strong form efficiency reflects future share price movements.
B) Semi-strong form efficiency addresses operational efficiency whereas strong form efficiency aims to address allocative efficiency.
C) Semi-strong form efficiency does not reflect all publicly available information whereas strong form efficiency does incorporate all publicly available information.
D) Semi-strong form efficiency does not reflect knowledge whereas strong form efficiency considers knowledge in addition to publicly available information and past price movements.
3. The chairperson of XYZ Company is concerned about the readability of the annual financial report that is about to be published on its website. XYZ Company is obliged to comply with International Financial Reporting Standards, and the report contains all of the required financial statements, the auditor's report, corporate governance statements, declarations of accounting policy, explanatory notes and a section that addresses the company's corporate social responsibility program.
The chairperson is wondering whether the report can be condensed. The issue that is concerning the chairperson is known as
A) information overload.
B) the costs of social responsibility reporting.
C) the cost of compliance.
D) the agency costs of monitoring.
4. Financial markets have achieved operational efficiency when
A) the costs of financial transactions are kept as low as possible.
B) the price of stocks and shares are available accurately and quickly.
C) the cost of transactions is a reflection of the actual cost incurred.
D) past records are used to predict the future prices of goods.
5. Current cost accounting reflects an approach to capital maintenance based on maintaining which one of the following?
A) operating capability of the business
B) financial capability of the business
C) profitability of the business
D) cost of assets in the business
Solutions:
Question # 1 Answer: A | Question # 2 Answer: D | Question # 3 Answer: A | Question # 4 Answer: A | Question # 5 Answer: A |