FINANCIAL ACCOUNTING AND REPORTING
HISTORY, DEVELOPMENT AND FUNCTIONS OF THE STANDARD-SETTING BODIES
Multiple Choice Practice Questions
Part 1
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Question 001
Being a not-for-profit corporation, this public interest organization was established to develop high-quality, understandable, enforceable and globally accepted accounting and sustainability disclosure standards.
a. IFRS Foundation
b. International Accounting Standards Board
c. International Sustainability Standards Board
d. IFRS Trustees
Answer to Question 001
A
The IFRS Foundation is a not-for-profit, public interest organization established to develop high-quality, understandable, enforceable and globally accepted accounting and sustainability disclosure standards.
Question 002
IFRS Foundation has how many standard-setting board/s?
a. Zero
b. One
c. Two
d. Three
Answer to Question 002
C
The standards of IFRS Foundation are developed by two standard-setting boards, the International Accounting Standards Board (IASB) and International Sustainability Standards Board (ISSB).
Question 003
This user group is the main focus of IFRS Standards.
a. Investors
b. Stockholders
c. Creditors
d. Regulatory agencies
Answer to Question 003
A
Investors need reliable, transparent and globally comparable information about companies to make better investment decisions. IFRS Standards meet this need by enabling companies worldwide to provide such information to their investors.
Investors are not only limited to stockholders.
Question 004
Statement I:
IFRS Foundation’s mission is to develop high-quality IFRS Standards that bring transparency, accountability and efficiency to capital markets around the world.
Statement II:
IFRS Foundation’s work serves the public interest by fostering trust, growth and long-term financial stability in the global economy.
Which of the foregoing is/are consistent to the IFRS Foundation’s mission statement?
a. I only
b. II only
c. Both I and II
d. Neither I nor II
Answer to Question 004
C
Question 005
One of the objectives of the IFRS Foundation is to develop, in public interest, high quality, understandable, enforceable and globally accepted standards, which are known as what?
a. International Accounting Standards
b. IFRS Standards
c. IFRS Accounting Standards
d. IFRS Sustainability Disclosure Standards
Answer to Question 005
B
Based on IFRS Foundation Constitution, IFRS Foundation aims to develop, in the public interest, high quality, understandable, enforceable and globally accepted standards (“IFRS Standards”) for general purpose financial reporting based on clearly articulated principles.
The set of developed accounting standards are called IFRS Accounting Standards.
The set of developed sustainability disclosure standards are called IFRS Sustainability Disclosure Standards.
Question 006
The governance of the IFRS Foundation primarily rests with whom?
a. Monitoring Board
b. Monetary Board
c. The Trustees
d. Public Authorities
Answer to Question 006
C
The governance of the IFRS Foundation shall primarily rest with the Trustees and such other governing organs as may be appointed by the Trustees in accordance with the provisions of the IFRS Constitution.
Question 007
Statement I:
IFRS Foundation’s Monetary Board provides a formal link between the IFRS Foundation’s Trustees and public authorities.
Statement II:
The IFRS Foundation’s Trustees may not make variations in the IFRS Foundation’s Constitution.
Which of the foregoing is/are true regarding IFRS Foundation?
a. I only
b. II only
c. Both I and II
d. Neither I nor II
Answer to Question 007
D
Based on IFRS Foundation Constitution:
A Monitoring Board shall provide a formal link between the Trustees and public authorities.
The Trustees shall use their best endeavors to ensure that the requirements of the Constitution are observed; however, they may make minor variations in the interest of feasibility of operation if such variations are agreed by a certain percentage of Trustees.
Question 008
IFRS Foundation’s Trustees shall comprise how many members?
a. 20
b. 21
c. 22
d. 23
Answer to Question 008
C
Question 009
Who is responsible for the approval of IFRS Foundation Trustees appointment?
a. IASB
b. IASC
c. Monitoring Board
d. European Union
Answer to Question 009
C
The Monitoring Board shall be responsible for the approval of all Trustee appointments and reappointments.
Question 010
What is the normal term of appointment of IFRS Foundation Trustee?
a. Two years
b. Three years
c. Five years
d. Ten years
Answer to Question 010
B
Trustees shall normally be appointed for a term of three years, renewable once.
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